Specialization of labor means that:
a. production requires a special kind of labor
b. the overall skill level of labor is increasing.
c. individuals produce goods other than those they want to consume.
d. individuals achieve self-sufficiency in production.
e. exchange within an economy consists of trading in services.
c
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The above figure shows the Lorenz curves for four different countries. If country C implemented a policy of redistribution from rich to poor, its Lorenz curve would
A) move toward country B's. B) move toward country D's. C) become positively sloped. D) move above the line of equality.
According to the graph shown, if the market is in equilibrium, producer surplus is area:
A. A.
B. A + B + C.
C. A + B + C + D + E.
D. D + E.
Sven likes to water ski, but can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's vacation convinced him that:
A. even for activities he really enjoys, total utility declines over time. B. blueberry picking yields higher total utility than does water skiing. C. even for activities he really enjoys, diminishing marginal utility eventually sets in. D. economic theory applies to things you buy, but not to recreational activities.
Assume that store brand cereal is an inferior good. If income rises, then the price of store brand cereal will ________ and the quantity sold of store brand cereal will ________.
A. fall; fall B. rise; rise C. rise; fall D. fall; rise