Answer :
When a country chooses to limit the kinds of goods or services it produces, it is practicing specialization.
Explanation:
1. Specialization refers to the concept where a country focuses on producing a limited range of goods or services that it can efficiently produce using its available resources. By doing so, the country aims to maximize its production efficiency and overall output.
2. By concentrating its resources and efforts on producing a specific set of goods or services, a country can achieve economies of scale, increase productivity, and enhance the quality of its products.
3. Specialization allows countries to trade with others based on their comparative advantages, where each country specializes in what it produces best and then trades to obtain goods and services that it does not produce efficiently.
Example:
- For instance, if Country A has a comparative advantage in producing agricultural products due to its fertile land, it may choose to specialize in agriculture while importing manufactured goods from Country B, which excels in manufacturing.
In summary, when a country limits the kinds of goods or services it produces to focus on what it does best, it is practicing specialization to optimize its production and trade relationships with other nations.
