Which outcome is most likely when producers engage in specialization?

• A. Increased efficiency and higher output
• B. Higher costs of production for each unit
• C. Reduced ability to trade with other producers
• D. Decreased productivity due to lack of variety

Answer: (A)

Verified step by step guidance

1. Understand the concept of specialization: it refers to producers focusing on a narrow range of tasks or products in which they have an advantage or greater skill.
2. Recall that specialization typically leads to increased efficiency because producers become more skilled and faster at their specific tasks, reducing wasted time and resources.
3. Recognize that increased efficiency usually results in higher output, as producers can produce more goods or services in the same amount of time.
4. Consider the alternative options: higher costs, reduced trade ability, or decreased productivity are generally not associated with specialization; in fact, specialization often lowers costs and encourages trade.
5. Conclude that the most likely outcome of specialization is increased efficiency and higher output, as it leverages comparative advantage and economies of scale.