Which of the following renults in international pecialization? Select one Diffle

Question

Which of the following renults in international pecialization? Select one Difflerences in benefits that comsumers and producers get from domestic market exchange Difflering conumer tastes Diseconomies of ocale in production O b. O c. A high world price for a good O e Diminishing returns to a variable factor of prodaction Question 7 Not ye answered Pnts ou of 1.0 F Flag question Suppose ase work in Nerw Ralph Ieland can produce 40 walking sticks or 10 boomerangs each hour. The opportumity cot of producing 1 walling stick is 025 bocmerang 001 hour of abor 05 hours of labor fo 5 6 8 9 0

Explanation / Answer

6) e is correct

International specialisation results in increasing returns to scale as variable factor of production(labour) can specialise in one activity and increases productivity. So to avoid diminishing returns, countries involve in international specialisation.

7) a is correct

To produce 40 walking sticks 10 boomerangs need to be given up. To produce 1 walking stick, 10/40= 0.25 boomerangs need to be given up. So opportunity cost is 0.25.

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