Which of the following best describes the reason why the division of labor allows individuals and firms to specialize and produce more?
a. It reduces the need for more workers.
b. It limits the need for economies of scale.
c. It allows individuals and firms to focus on areas of disadvantage due to natural factors and skill levels.
d. It allows individuals and firms to take advantage of economies of scale.
d. It allows individuals and firms to take advantage of economies of scale.
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The self-interest model of government:
a. suggests that government officials are selfish. b. explains why there are limits on government taxation and spending. c. shows who some government projects take place even if the cost exceeds the benefits. d. All of the above.
If you exhibit endowment effect, then you
A) decide rationally when making decisions about selling but not when making decisions about buying. B) have a strong attachment to things you already own. C) buy something you cannot afford. D) decide rationally when making decisions about buying but not when making decisions about selling.
The primary function of taxes is to
A. Increase the purchasing power of the private sector. B. Increase private saving. C. Correct inequities in the distribution of goods and services. D. Transfer the command of resources from the private sector to the public sector.
?The graph shows the market for wheat in an economy. The equilibrium price and quantity of wheat bought and sold in the domestic market in the absence of international trade are P2 and Q2, respectively. If the world price of wheat is P3, the net domestic gain from trade is shown by area _____ in the graph.
a. ?C b. ?E c. ?B d. ?A e. ?D