Among the changes resulting from increased global trade is:

• A. a decrease in the variety of goods available to consumers
• B. greater specialization of production among countries
• C. lower overall efficiency in resource allocation
• D. reduced competition among firms worldwide

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of specialization in international trade. Specialization occurs when countries focus on producing goods for which they have a comparative advantage, meaning they can produce at a lower opportunity cost than other countries.
2. Step 2: Recognize that increased global trade allows countries to exchange these specialized goods, leading to a greater variety of goods available to consumers rather than a decrease.
3. Step 3: Analyze how specialization improves overall efficiency in resource allocation because countries allocate resources to industries where they are most productive, increasing total output.
4. Step 4: Consider the effect of global trade on competition. Increased trade generally increases competition among firms worldwide, as firms face competitors from other countries.
5. Step 5: Conclude that among the options, the most accurate effect of increased global trade is the greater specialization of production among countries, which enhances efficiency and variety rather than reducing them.