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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Which of the following statements is CORRECT?
A) Taken together, expenditures on national defense and on income security and health programs now account for less than half of all federal government spending. B) Expenditures on national defense now account for more than twice as much federal government spending as expenditures on income security and health programs. C) Since the mid-1940s, expenditures on national defense have increased considerably as a percentage of total federal government spending. D) Since the mid-1940s, expenditures on income security and health programs have increased considerably as a percentage of total federal government spending.
The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________
A) rises; decreases B) falls; perhaps changes but we can't say if it increases, decreases, or stays the same C) falls; increases D) does not change; perhaps changes but we can't say if it increases, decreases, or stays the same E) rises; perhaps changes but we can't say if it increases, decreases, or stays the same
When the money supply is expanding rapidly and the general level of prices increasing sharply, economic growth is
A) slowed by the resulting unpredictability of the future level of prices. B) enhanced because profits are higher so that capital investment is greater. C) enhanced because existing debt is reduced in value, so people are willing to buy more goods. D) enhanced as economic activity grows more rapidly.
Value added is the difference between the value of good as they leave a stage of production and cost of the goods as they entered that stage of production.
Answer the following statement true (T) or false (F)