Title: Benefits of Specialization
Headings: Benefits of Specialization
Benefits of Specialization
Specialization leads to greater economic efficiency and consumer benefits.
Learning Objective
Key Points
Term
Full Text

Content: Benefits of Specialization
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Benefits of Specialization
Specialization leads to greater economic efficiency and consumer benefits. Learning Objective
Discuss the effects of specialization on production
Key Points
Whenever countries have different opportunity costs in production they can benefit from specialization and trade. Benefits of specialization include greater economic efficiency, consumer benefits, and opportunities for growth for competitive sectors. The disadvantages of specialization include threats to uncompetitive sectors, the risk of over-specialization, and strategic vulnerability. Term
comparative advantage
The ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another. Full Text
Whenever a country has a comparative advantage in production it can benefit from specialization and trade. However, specialization can have both positive and negative effects on a nation's economy. The effects of specialization (and trade) include: Greater efficiency: Countries specialize in areas that they are naturally good at and also benefit from increasing returns to scale for the production of these goods.