For PPF with variable costs, when does specialization stops?
An economy may be able to produce for itself all the goods and services it needs to function, using the PPF as a benchmark. However, in reality, this can lead to general inefficiencies in resource allocation and impede future growth when the gains from trade are taken into account.
Through specialization, a country can focus on producing just a few of the things it does best, rather than trying to do it all alone.
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