Question 1

With specialization

Accepted Answer

Specialization allows individuals and businesses to focus on producing goods and services they are best at, which results in greater efficiency and productivity. This leads to increased material well-being for the society as a whole. While opportunity costs may still exist, specialization allows for better utilization of resources and ultimately higher productivity. There is not necessarily more emphasis on self-reliance, and individuals can actually become more productive through specialization as they can focus on their strengths and skills.

Question 2

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

Accepted Answer

Irene can make 4 chairs in an hour, while Greg can make 3 chairs in an hour. Therefore, Irene has the absolute advantage in the production of chairs.

Question 3

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario, the opportunity cost of making one waffle for Maria is

Accepted Answer

Maria can make either 8 pancakes or 2 waffles, meaning for every waffle she makes, she gives up the opportunity to make 4 pancakes (8 pancakes / 2 waffles = 4 pancakes per waffle).

Question 4

The idea of comparative advantage is related to

Accepted Answer

The concept of comparative advantage is based on the idea of opportunity cost, which refers to the benefits given up by choosing one alternative over another. It suggests that countries should specialize in producing goods in which they have a lower opportunity cost and trade with other countries to acquire goods in which they have a higher opportunity cost.

Question 5

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario

Accepted Answer

Maria has the lower opportunity cost of producing pancakes compared to waffles. To make 1 waffle, Jose gives up 2.5 pancakes (10/4), while Maria only gives up 4/8 = 0.5 pancakes. Therefore, Maria has the comparative advantage in making pancakes.

Question 6

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario, the opportunity cost of making one pancake for Jose is

Accepted Answer

The opportunity cost for Jose of making one pancake is the number of waffles he could have made instead. Using the ratios given in the problem, we can calculate the opportunity cost:
Jose: 10 pancakes / 4 waffles = 2.5 pancakes per waffle
Maria: 8 pancakes / 2 waffles = 4 pancakes per waffle

Therefore, for Jose, the opportunity cost of making one pancake is 2.5/1 waffles, or 2/5 waffle.

The best choice would depend on the situation, such as the number of orders for pancakes versus waffles and the cost of ingredients. The restaurant may want to produce more of the item with the higher profit margin or the item that is more in demand.

Question 7

Two factories make wooden chairs. If the workers in factory A make each chair from start to finish and the workers in factory B divide labor, one would assume

Accepted Answer

Factory B can take advantage of division of labor and produce more efficiently. Dividing labor allows each worker to specialize in a specific task, reducing the time it takes to complete one chair. As a result, factory B can produce more chairs in the same amount of time as factory A, even though the workers in factory A may have more control over the quality of each chair.

Question 8

The making and selling of a pencil for ten cents would likely NOT be possible, but for

Accepted Answer

The division of labor would allow for the specialization of tasks in the production process, which would increase efficiency and lower costs, making it possible to produce and sell a pencil for ten cents. However, relative advantage, the production possibilities curve, and absolute advantage do not necessarily address the issue of cost and affordability of the final product.

Question 9

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario

Accepted Answer

Jose can make more waffles than Maria in the same amount of time, giving him the absolute advantage in making waffles.

Question 10

Specialization occurs because

Accepted Answer

Specialization occurs because people have different skills, which allows them to focus on producing goods or providing services in which they have a comparative advantage. By specializing, individuals and businesses can increase their efficiency and productivity, leading to overall economic growth and development.

Question 11

The division of labor refers to

Accepted Answer

The division of labor is the practice of assigning different workers to different tasks or jobs based on their skills and abilities. This allows for greater specialization and efficiency in production.

Question 12

Comparative advantage is the ability to

Accepted Answer

Comparative advantage is the ability to perform an activity at a lower opportunity cost. This means that a country can produce a good or service at a lower opportunity cost than another country, making it more efficient to produce that good or service. By specializing in producing goods or services in which a country has a comparative advantage, and trading with other countries for other goods or services, both countries can benefit and be more efficient overall.

Question 13

One of the benefits of specialization is

Accepted Answer

Specialization allows individuals to focus on a single task, which can lead to increased efficiency and productivity, thus resulting in greater output.

Question 14

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour, then

Accepted Answer

To determine comparative advantage, we need to calculate the opportunity cost of producing each item for each person.

For Irene, producing 4 chairs in an hour means she must give up producing 1 table in that same hour. Therefore, her opportunity cost of producing 1 table is 4 chairs.

For Greg, producing 3 chairs in an hour means he must give up producing 2 tables in that same hour. Therefore, his opportunity cost of producing 1 table is 1.5 chairs (calculated as 3 chairs / 2 tables).

Comparing the opportunity costs, we see that Irene has a lower opportunity cost for producing chairs (1) than Greg (1.5). Therefore, Irene has the comparative advantage in the production of chairs.

Question 15

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?

Accepted Answer

Specializing in a narrow set of skills allows individuals to become more productive and efficient in their work, ultimately leading to higher income opportunities. Additionally, becoming proficient in multiple fields of endeavor may require a significant investment of time and resources without providing a noticeable return on investment in terms of income or career advancement.

Question 16

Division of labor

Accepted Answer

Division of labor allows workers to focus on specific tasks, increasing efficiency and productivity, which ultimately leads to an increase in output in the economy.

Question 17

When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to

Accepted Answer

Adam Smith's concept of specialization allowed workers to focus on one specific task, eliminating the time wasted shifting from one task to another. This leads to an increase in efficiency and output. There is no mention of new machinery or bonuses, and while boredom may have been a factor, it is not the primary reason for the increase in output.

Question 18

When productive activities are organized according to the principle of the division of labor

Accepted Answer

The division of labor allows each worker to specialize in a particular task, which increases efficiency and productivity, leading to an increase in total output. Therefore, choice C is correct. A, B, and D are incorrect as the principle of the division of labor does not eliminate scarcity, capital investment is still necessary, and an inefficient outcome does not result if it is organized effectively.

Question 19

The concept of absolute advantage relies on

Accepted Answer

Absolute advantage refers to the ability to produce more units of an item with a given amount of resources.

Question 20

Division of labor means that

Accepted Answer

Division of labor is a production process where tasks are broken down into smaller, specialized tasks. Each worker is assigned a specific task, which allows for greater efficiency and productivity.

Quiz 2: Scarcity and the World of Trade-Offs

With specialization

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario, the opportunity cost of making one waffle for Maria is

The idea of comparative advantage is related to

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario, the opportunity cost of making one pancake for Jose is

Two factories make wooden chairs. If the workers in factory A make each chair from start to finish and the workers in factory B divide labor, one would assume

The making and selling of a pencil for ten cents would likely NOT be possible, but for

Jose and Maria work at a restaurant. Jose can make either 10 pancakes or 4 waffles; Maria can make either 8 pancakes or 2 waffles. According to this scenario

Specialization occurs because

The division of labor refers to

Comparative advantage is the ability to

One of the benefits of specialization is

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour, then

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?

Division of labor

When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to

When productive activities are organized according to the principle of the division of labor

The concept of absolute advantage relies on

Division of labor means that