Which economic term is defined as the concentration of productive efforts on a limited number of activities?

Specialization refers to the economic practice where individuals, businesses, or countries concentrate their productive efforts on a limited number of activities or tasks. This allows for greater efficiency and expertise in those specific areas, as resources are allocated toward developing specific skills or producing particular goods. By focusing on a limited range of activities, entities can enhance productivity and benefit from economies of scale, leading to improved outcomes in terms of output and quality.

In contrast, trade involves the exchange of goods or services between different parties and does not inherently require concentration on limited activities. Diversification refers to the strategy of broadening a range of different activities or investments to reduce risk or enhance returns, which is the opposite of specialization. Globalization describes the process by which businesses or other organizations develop international influence or operate on an international scale, focusing on the global interconnectedness of economies rather than the specific concentration of efforts. Thus, specialization is the most accurate term for the concentration of productive efforts on a limited number of activities.