Specialization and trade are beneficial to society because: a) the output of economic goods may...
Question:
Specialization and trade are beneficial to society because:
a) the output of economic goods may be increased with no increase in resources.
b) scarce resources are utilized more efficiently.
c) a division of labour lowers prices for products.
d) all of the above are correct.
Trade:
Trade, an economic term, is used to define the economic transaction that is made by the people of the same country or different countries. Domestic trade explains the trade within the economy, while international trade explains the trade between two or more countries.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe correct option is d) all of the above are correct.
Explanation:
Specialization is when an individual has the ability to generate commodity or...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:

from
Chapter 30 / Lesson 9International trade organizations and trade agreements regulate, influence, and control elements of the international economic landscape. Learn more about international trade, staple trade agreements, tariffs, free trade, treaties, the World Trade Organization.
Related to this Question
- In the short run, an unexpected increase in prices will - reduce resource prices and increase the quantity of goods supplied. - decrease the productive capacity of firms and decrease the quantity of goods supplied. - increase the profits of firms, ther
- A person who has an absolute advantage in the production of all goods will: a) produce all goods at the lowest opportunity cost. b) also have a comparative advantage in the production of all goods. c) not be able to gain from specialization and trade. d)
- Specialization and trade allow individuals to a. consume outside their own production possibilities frontier (PPF). b. shift their PPF outward. c. produce more goods with less technology. d. eliminate scarcity. e. produce fewer goods with less technology.
- 1. Specialization and trade allow individuals to: A. their own production possibilities frontier (PPF) B. shift their PPF outward. C. produce more goods with less technology. D. eliminate scarcity. E
- The marginal product of labor initially rises as more labor is employed because of: a. total factor productivity. b. a fall in the cost of hiring additional labor. c. constant returns to scale. d. division and specialization of labor. e. an increase in pr
- The marginal revenue product is: a. an increase in the profit of a firm with an increase in the output by one unit. b. the value that all the unskilled workers contribute to a firm. c. the value th
- As the quantity produced by a firm increases, marginal cost eventually starts increasing because: A. of diminishing, or decreasing, marginal product of labor. B. in the short run, the firm cannot add workers. C. each additional unit is cheaper to produc
- If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of: a) specialization of resources. b) improved utilization of by-products. c) decreased input prices. d) limited decision-making ca
- A society that is producing its maximum combination of goods and using all available resources for production a. has minimized its opportunity cost. b. has maximized its opportunity cost. c. is operating on its production possibilities frontier (PPF). d.
- Why is specialization in production beneficial? a. It eliminates the need for the division of labor. b. It permits people to expand production and achieve rates of output that would otherwise be unattainable. c. It allows everyone to be self-sufficient. d
- When society overallocated resources to the production of a product it means that the ________. (a) investment in the product is declining (b) opportunity cost of the product is decreasing (c) marginal benefit is greater than the marginal cost (d) margina
- While specialization allows firms to produce many goods and services at lower production and transaction costs than individuals can, most households still produce some goods and serves for themselves.
- Which of the following is not a reason why specialization and trade are beneficial to society? a. Specialization fosters learning by doing, thus lowering the unit-costs of products. b. Firms and workers become less dependent on others for producing goods
- The production possibilities curve will shift outward, upward, and \ or, to the right when? A) corporate profits increase. B) Economic growth occurs. C) Resources are used more efficiently. D) there is a reduction in labour.
- While specialization allows firms to produce many goods and services at lower production and transaction costs than individuals can, most households still produce some goods and services for themselve
- Given production possibilities frontier (a), the combination of Capital and consumer goods indicated by point L: O would entail substantial unemployment. O would entail an inefficient use of society's resources. O is beyond the productive capacity of t
- A firm that maximizes profits also: a. pays input prices lower than other firms do. b. cuts corners in production processes so that its products are made too cheaply. c. is inefficient. d. uses the least-cost combination of resources.
- If a firm wants to maximize its profits, it should: a. equate the marginal revenue product for each input to the price of the input. b. hire unskilled labor rather than skilled labor since unskilled labor is cheaper. c. hire lots of capital and very lit
- A society that is producing its maximum combination of goods and using all available resources for production a. is operating outside its PPF. b. has eliminated scarcity. c. is operating on its production possibilities frontier (PPF). d. has maximized
- If society is producing a combination of goods on its production possibilities frontier: A. it must be employing all available resources. B. it must be growing. C. it is using all the available natural resources but may not be using all available labor re
- Allocative efficiency is concerned with : (a) achieving the full employment of all available resources. (b) producing every good with the least-cost combination of inputs. (c) producing the combination of goods most desired by society. (d) reducing
- As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good? a. It decreases. b. It might increase, decrease, or remain constant depending on how much people
- As we move along the production possibilities frontier: a. the possibilities of trade-offs diminish. b. the production of one good increases as the production of the other good decreases. c. more of both goods can be produced. d. a trade-off is not possib
- If an economy is being "productively efficient," then that means the economy is A. producing the products most wanted by society. B. fully employing all economic resources. C. maximizing the returns to factors of production. D. using the least costly prod
- If an industry is characterized by substantial economies of scale, as each firm in the industry expands its production capacity, we will observe: a. an increase in marginal costs. b. a decrease in the marginal product of labor. c. a decrease in the averag
- Goods and services are scarce because: a. people are greedy b. they are produced using scarce resources c. firms keep production low in order to earn higher profits d. they are produced by firms that
- Society must pay the full opportunity cost of any activity: a. that uses scarce resources. b. that causes costs to rise. c. that increases revenues. d. none of these
- A market economy over-allocates resources to the production of goods which involve. (a) spillover costs (b) spillover benefits
- As the home nation increases the production of R&D by devoting more skilled resources, its productivity rises and its relative price rises. This situation creates: a. no measurable gains from offshoring. b. equal gains from offshoring. c. greater gains fr
- An economy uses only labor as input to produce two goods, A and B. If its production possibilities frontier (PPF) of two goods is a negative-sloped straight line, what is the implication in opportunity costs? Will the law of increasing costs still hold?
- The marginal revenue product is: a) the value of all the final goods and services produced by a firm. b) the value that a worker contributes to a firm. c) an increase in the profit of a firm with an increase in the output by one unit. d) the output pe
- The marginal product of labor is: A. equal to the demand for labor. B. the payment made to workers for their contribution to the output they produce. C. the change in a firm's revenue as a result of hiring one more worker. D. the additional output a firm
- Goods that are bought by businesses to increase their productive resources are called: a. consumption goods b. capital goods c. export goods d. none of the above
- In a Production Possibilities Curve depicting the trade-off between with capital goods vs. consumer goods, an economy choosing more capital goods and less consumption goods will, ceteris paribus: a. Be inefficient b. Grow slower c. Grow faster d. Not have
- For both parties to benefit from specialization and trade, the trading parties must agree on a. a price somewhere between their opportunity costs of production. b. a plan not to trade with other parties. c. who has the absolute advantage in production. d.
- Allocative efficiency is concerned with: a. producing the combination of goods most desired by society. b. achieving the full employment of all available resources. c. producing every good with the least-cost combination of inputs. d. reducing the co
- If prices increase for an export good and provide an incentive to increase production in an economy with specialized resources, will the higher price always outweigh the increasing opportunity cost of
- 1. Opportunity cost is: a.The variable cost a firm incurs by increasing output one unit. b.The value of the best alternative use of a firm's resources. c.The output opportunities a firm gains when
- The company you work for hires labor and capital in competitive factor markets. Currently the wage rate is $10 per hour and capital is rented at $21 per hour. If the marginal product of labor is 30 units of output per hour and the marginal product of capi
- Assume that a purely competitive firm uses two resources, labor (L)and capital (C), to produce a product. The market price of this product is $1.00. The Marginal Product (MP) and prices of the resourc
- If a market is being "productively efficient," then that means the market is: a. Producing the products most wanted by society, b. Fully employing all economic resources, c. Maximizing the returns to factors of production, d. Using the least costly produc
- Land, labor, capital and entrepreneurial talent are often referred to as: A. production possibilities. B. goods and services. C. unlimited human wants. D. opportunity costs. E. scarce economic resources.
- If the marginal product of labor is 2, the marginal product of capital is 4, the wage rate is $3, the rental price of capital is $6, and the price of output is $1.50, then the firm should: a. increase output by hiring more labor, more capital, or both. b.
- If the marginal product of labor is 3, the marginal product of capital is 4, the wage rate is $4.50, the rental price of capital is $6, and the price of output is $1.50, then the firm should: A. increase output by hiring more labor, more capital, or both
- The long-run average cost of production might decrease as output increases due to? A. indivisible inputs, variable costs, and economies of scale. B. divisible inputs, specialization, and diseconomies of scale. C. indivisible inputs, specialization, and
- For a production function with a diminishing, but positive, marginal product of labor: a. Output increases at an increasing rate as more workers are employed. b. Output increases at a decreasing rate as more workers are employed. c. Output declines as
- In economics, specialization means: a) producing something using only one type of resource, such as labor. b) producing something using only one type of labor. c) focusing efforts on a particular product or a single task. d) producing only one unit of out
- 1. Higher economic growth can result from A. improve resource allocation B. minimally trained labor force C. semi skilled labor force D. inefficient production methods 2. Growth is advantageous t
- World output of goods and services increases with specialization because: A. the world's resources are used more efficiently. B. the production possibilities curve shifts outward for each country. C. the workers in each country work fewer hours per week.
- If increased capital usage reduces the firm's short-run demand for labor, then labor: a. is a regressive factor. b. labor and capital are complements in production. c. labor and capital are substitutes in production. d. labor is a Giffen factor.
- Opportunities created by trade: induce a greater degree of specialization. are evidenced by higher opportunity costs of production. are few and far between.
- Suppose in an economy some resources are not utilized in their most productive use. If society decides that it wants more of one good, A) it will have to increase the quantity of resources in the economy. B) it will have to give up production and consumpt
- Generally, opportunity costs increase and the production possibilities frontier bows outward. Why? a. Unemployment is inevitable. b. Resources are not equally useful in all activities. c. Technology is slow to change. d. Labor is scarcer than capital.
- The production possibilities curve shows the: A. various combinations of two goods that can be produced when society employs all its scarce resources. B. minimum outputs of two goods that will susta
- The economy experiences economic growth if: A.the resource base decreases. B.the production possibilities frontier shifts inwards. C.the number of workers decreases. D.the production possibilities frontier shifts outwards.
- Labor productivity and the price of the good being produced are two variables that contribute to: a. whether or not a union forms. b. the marginal product. c. the demand for the product. d. the wage rate.
- Labor productivity and the price of the good being produced are two variables that contribute to: a. whether or not a union forms. b. the marginal product. c. the demand for the product. e. the wage rate.
- Assume that both the product and labor markets are perfectly competitive. It would be profitable for a firm to hire additional labor if the ratio of the wage to the marginal produce of labor is a. les
- We do not see complete specialization in the real world because: a. not all goods and services are traded internationally, production of most goods involves increasing opportunity costs, and tastes for products differ. b. not all goods and services are
- When an economy produces a combination of goods that lies on the production possibilities frontier: A. resources are being used fully and efficiently. B. prices are constant. C. opportunity cost is constant. D. resources will never be depleted. E. prices
- When a perfectly competitive firm employs one worker, it produces 20 units of output. When the same firm employs two workers, it produces 39 units of output. The firm sells its product for $10 per unit. What is the marginal revenue product connected with
- The marginal product of labor is: A) the additional output produced by an extra worker B) the increase in costs borne by the firm when one extra worker is hired C) always greater than the wage earned by one additional worker D) the increase in firm revenu
- As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good? a. It might increase, decrease, or remain constant depending on how much people value the additio
- The use of money contributes to economic efficiency because: a. it promotes specialization by overcoming the problems with barter b. roundabout production couldn't occur without the availability of money c. its necessary for the creation of capital goods
- Diminishing marginal returns means that: a. as more capital is used in production, but the labour input is held constant, MPK falls. b. as labour increases and capital decreases for a given level of output, the marginal product of labour divided by the
- The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called: a. the law of comparative advantage b. the law of production possibilities c. the
- When an increase in the range of goods produced brings a decrease in the average total cost of production, the firm is experiencing A. diminishing returns. B. economies of scale. C. economies of scope. D. diseconomies of scale.
- If firms are experiencing unplanned reductions in their inventories: a. firms should reduce their production. b. aggregate output exceeds aggregate expenditures. c. firms will increase output and hire more workers. d. the economy has attained equilibrium.
- An industry's supply curve is more likely to be elastic if: a. producers have low levels of stocks. b. new firms are unable to enter the market. c. there are shortages of skilled labor needed by the firm to increase production. d. firms are operating at b
- If the demand for a final product rises, then this results in: (a) a decrease in the product's price at the current quantity. (b) a reduction in the marginal revenue product of labor. (c) a fall in the demand for labor by the firm producing this item. (d)
- 1. An overallocation of resources in an industry means that for the last unit produced, a. the marginal cost of production is falling. b. society places a higher value on the resources required to pro
- A business buys $5,000 worth of resources to produce a product. The business makes 100 units of the product and each of them sells for $65. What is the value added by the business to these products? a. $1,500 b. $6,500 c. $5,000 d. $1,000 e. none of the a
- When a transfer price increases: A. the profits of the division producing the intermediate product will rise. B. the profits of the division producing the intermediate product will fall. C. the costs of the division producing the intermediate product will
- Increasing marginal returns to labor might occur at low levels of labor input because of A. differing factor proportions. B. decreasing use of machinery and increasing use of technology. C. increasing average costs. D. increasing specialization of tasks.
- The marginal product of labor is equal to the: A. incremental cost associated with a one unit increase in labor B. incremental profit associated with a one unit increase in labor C. increase in labor necessary to generate a one unit increase in output D.
- If a per-unit tax is imposed on a product, a) the firms producing that product will increase their use of labor and decrease their use of capital. b) the firms producing that product will decrease their use of labor and capital. c) the firms producing tha
- Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by a. also increasing the production of the second good. b. decreasing the production of the second good.
- The marginal product of labor is the increase in total product from a A. one-dollar increase in the wage rate, while holding the price of capital constant. B. one unit increase in the quantity of labor, while also increasing the quantity of capital by one
- If all If all resources used in the production of a product are increased by 10% and output increases by less than 5%, then the firm is experiencing: A. economies of scale. B. diseconomies of scale. C. constant returns to scale. D. decreasing average tot
- Increasing marginal returns to labor: a. occur only when there are increasing marginal returns to capital. b. are the result of specialization and division of labor in the production process. c. describe the portion of a total product curve where the marg
- A firm uses capital and labor to produce gadgets. If the firm profit maximizing combination of capital and labor is 2 and 3 respectively and each machine costs $50 an hour and each worker $20 an hour. What is the firm's production costs in an hour?
- The marginal physical product of labor declines as long as there is any opportunity cost associated with the production of the good.
- If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will A. not change its average product of labor. B. decrease its average product of labor. C. increase its mar
- A firm has production function f(L,K)=2L+4K. Then, if the firm substitutes 2 units of labor WITH one unit of capital? a. Production increases b. The Marginal product of labor decreases c. The Marg
- Total output in an economy increases when each person specializes because: (i) there is less competition for the same resources. (ii) a wider variety of products will be produced within each country due to specialization. (iii) government necessarily p
- The additional revenue earned from hiring one more worker is known as the: A. marginal physical product of labor. B. marginal revenue product of labor. C. marginal factor cost of labor. D. marginal utility of labor.
- A firm increases the number of workers it hires from 50 to 52, and as a result, output increases from 100 to 110. Each of the additional units of output can be sold for $2. What is the marginal revenue product of the 52nd worker? A. 2 B. 5 C. 10 D. 20 E.
- As we move along the production possibilities frontier: a. more of both goods can be produced. b. the possibilities of tradeoffs diminish. c. a tradeoff is not possible because nations need all goods. d. the production of one good increases as the product
- A price-taking firm chooses its inputs to maximize long-run profits. Labor and capital are substitutes in production, and both exhibits decreasing returns to scale, q(L, K) = L^{\frac{1}{2 + K^{\frac{1}{2. The output price is 100, and the price of eac
- If the additional output from each new worker is rising: a) the marginal cost of that output is rising because the only additional cost to producing more output is the additional wages paid to hire more workers. b) the marginal cost of that output is risi
- If the marginal benefit received from a good is less than the marginal cost of production, then: a) society's well-being can be improved if production increases. b) society's well-being can be improved if production decreases. c) society's well-being cann
- Whenever productive resources are used to make capital goods: A. absolute advantage occurs. B. society is giving up current consumption. C. the production possibilities curve becomes flatter. D. society is not producing efficiently.
- The marginal revenue product of labor declines as the number of workers increases because A. firms must lower prices for the final product when they want to sell more units. B. of diseconomies of sc
- A firm that wants to employ workers should a) hire workers as long as the wage is greater than the value of the marginal product. b) hire workers as long as the wage is less than the value of the marginal product. c) not hire workers if the value of the
- The nominal wage rate is W = $1,000 per worker and the price of the output is P = $10 per unit. Suppose that due to a technological advance, the productivity of labor increases so that the marginal product of each and every worker increases by 40 units. S
- Which of the following is true regarding the marginal product of labor? a. It declines as more capital is used. b. It rises as the product price falls. c. It rises as more labor is used. d. It declines as more labor is used.