Explain how comparative advantage, specialization and division of labor are related
What will be an ideal response?
Comparative advantage is the ability to perform an activity at a lower opportunity cost. Specialization involves the organization of economic activity among different individuals and regions. Most individuals do specialize based on their comparative advantage. The division of labor refers to the segregation of a workers into different specific tasks. The division of labor occurs when resources specialize into specific tasks. Total output is greater when resources are specialized.
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A corrective tax equal to the external cost imposed on third parties levied on polluters will: a. eliminate all pollution
b. increase the level of pollution. c. force polluters to internalize the external cost resulting from their actions. d. usually have no impact whatsoever on pollution levels, but will generate tax revenue for the government.
An unexpected decrease in the demand for accountants will lead to
a. an increase in the earnings of accountants. b. an increase in the incentive of students to prepare for a career in accounting. c. a reduction in the future supply of accountants. d. an increase in the employment opportunities of accountants.
Banks cannot influence the money supply if they are required to hold all deposits in reserve
a. True b. False Indicate whether the statement is true or false
The idea that governments can plan growth by setting industrial policies to encourage growth of certain industries:
A. is controversial. B. is a proven method for economic growth. C. has worked for the majority of countries that have tried it. D. None of these is true.