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Economics
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Why does specialization lead to welfare improvement? Why engaging in trade is better than trying to be self-sufficient? Give an example

Aug 3rd, 2015

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With a small increase in the level of specialization, the benefits would accrue rapidly.For the individual entrepreneur, the benefits of industrialization were enormous; it allowed a producer to create a greater supply of goods at lower cost, to distribute them widely, and to amass wealth and power. There were also societal benefits from this new level of specialization: the quality of output was standardized, cost of production per item dropped, greater variety of goods and services were made available, new techniques were perfected, and slavery became less profitable.

Countries will usually specialise in and export products, which use intensively the factors inputs, which they are most abundantly endowed. For example the Canadian economy which is rich in low cost land is able to exploit this by specializing in agricultural production. 

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Aug 3rd, 2015

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