21) The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as
B) comparative value.
22) Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears. This best demonstrates the concept of
A) division of labor.
C) comparative advantage.
D) absolute advantage.
23) With specialization
A) opportunity costs tend to be constant.
B) there are greater gains in material well being.
C) there is more emphasis on self-reliance.
D) society is more productive while individuals are less productive.
24) Specialization occurs because
A) society trades current consumption for future consumption.
B) the production possibilities curve tends to be linear.
C) people have different skills.
D) society produces made the production possibilities curve.
25) The concept of absolute advantage relies on
A) the idea of comparative advantage.
B) the ability to produce more units of an item with a given amount of resources.
C) the idea of opportunity cost.
D) the concept of economic efficiency as measured on the production possibility curve.
26) The idea of comparative advantage is related to
A) the idea of opportunity cost.
B) the idea of absolute advantage.
C) using the worker with the most diverse sets of skills.
D) engineering efficiency.
27) The division of labor refers to
A) the separation of blue-collared workers and white-collared workers.
B) finding the best order of performing tasks.
C) the separation of workers into union workers and non-union workers.
D) the assignment of different workers to different tasks.
28) Division of labor
A) increases the amount of capital in the economy.
B) leads to an increase in the amount of output in the economy.
C) makes economic goods possible.
D) is not possible for service goods.
29) Comparative advantage is the ability to
A) perform an activity at a lower opportunity cost.
B) determine who your best trading partners are.
C) determine the best use of capital goods.
D) convince others of the best choices to make in their own self-interest.
30) Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?
A) They feel that doing so will minimize their chances of being unemployed.
B) They don't correctly perceive the costs of being so specialized.
C) It allows them to earn more income by being more productive.
D) They are unaware of how much better off they would be if they diversified their skills.