Question

1.Which of the following is NOT an example of scarcity?

Select the correct answer below:

Due to a lack of rain in San Diego, California, the amount of water for families is limited.

Crude oil was in short supply in the 1970s, leading to a quantity demanded being greater than the quantity supplied.

After textbook buyback season, Amazon received an influx of used textbooks into their inventory.

Fresh water bass are on the decline due to disease.

2.

Which of the following are among the reasons offered by Adam Smith for why specialization results in higher levels of output?

(Select all that apply. Hint: There are 2 correct answers.)

Select all that apply:

• Specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage.

• Specialization allows businesses to take advantage of economies of scale.

• Specialization allows workers to experiment with different tasks to see which responsibilities make them happiest at work.

• Workers who specialize in certain tasks forgo an opportunity to learn how to do new tasks efficiently.

3.

What is the benefit of having economies of scale?

Select the correct answer below:

Tasks are broken down into smaller pieces and done by a larger number of workers, instead of all the tasks of production being done by one person.

Production costs increase as the number of goods produced increases.

The production a good or service which is divided into a number of tasks that different workers perform, instead of all the tasks being done by the same person.

For many goods, as the level of production increases, the average cost of producing each individual unit declines.

Answer 1