Although specialization of labor increases efficiency of production, it can lead to another major problem:
a. the need to exchange goods among producers.
b. the need to remain fully employed.
c. the depletion of natural resources.
d. assuring that exchange leads to mutual gains.
e. All of the above are correct.
a
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The labor demand curve of a purely competitive seller
A. slopes downward because of diminishing marginal utility. B. slopes downward because the elasticity of demand is always less than unity. C. is perfectly elastic at the going wage rate. D. slopes downward because of diminishing marginal productivity.
Why does the production possibilities frontier have a bowed out shape rather than being a straight line?
What will be an ideal response?
An increase in price could occur due to a(n)
a. Increase in demand and no change in supply b. Decrease in supply and no change in demand c. An increase in demand and decrease in supply d. All of the above
If, in a given economy, production is taking place at a point inside the production possibility frontier:
a. resource allocation is technically and allocatively efficient. b. resource allocation is technically efficient but allocatively inefficient. c. resource allocation is technically inefficient and allocatively efficient. d. resource allocation is technically and allocatively inefficient.