Which of the following is true of specialization? choose the correct answer from the following choices, and then select the submit answer button. incorrect:
a. people should diversify and specialize in many things.
b. people should diversify and specialize in many things.
c. specialization results in a decrease in output.
d. specialization was an important theory in the eighteenth century, but is no longer relevant today.
e. the gains from trade are due to specialization.

E. The gains from trade are due to specialization.

Explanation:

Specialization consists of the division of tasks where each person plays a role, specializing in that. Over time specialization has increased the productivity of companies and this is relevant even today as it lowers production costs. This also applies to countries. International trade theories explain that countries evolve by specializing in what has the greatest production advantage. Thus, if a country produces many grapes, it can specialize in wine production and export it. By contrast, this country may import products to which it does not specialize. Thus, everyone gains from international trade, the result of specialization.

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