Differences in production efficiencies among nations in producing a particular good result from:

• A. the presence of positive externalities in all markets
• B. identical opportunity costs for all goods
• C. uniform government regulations across countries
• D. variations in resource endowments and technology

Answer: (D)

Verified step by step guidance

1. Understand that differences in production efficiencies among nations arise because countries have different amounts and types of resources (resource endowments) and different levels of technology.
2. Recognize that positive externalities, identical opportunity costs, and uniform government regulations do not explain differences in production efficiencies across countries, as these factors either do not vary consistently or do not directly affect production capabilities.
3. Recall the concept of comparative advantage, which is based on variations in opportunity costs that stem from differences in resource endowments and technology.
4. Note that resource endowments include factors like labor, capital, land, and natural resources, while technology refers to the methods and knowledge used to transform inputs into outputs.
5. Conclude that variations in these two factors—resource endowments and technology—are the fundamental reasons why nations differ in their production efficiencies for particular goods.