The Greater the Degree of Specialization in the Economy,the

question 133

Multiple Choice

The greater the degree of specialization in the economy,the:

• A)easier it is to discover a double coincidence of wants.
• B)more feasible is a barter system.
• C)less likely it is that monetary exchange will develop.
• D)harder it is to negotiate an exchange rate between all pairs of goods.
• E)more likely it is that individual consumers are self-sufficient.

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Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Perfectly Price Discriminate

A theoretical market condition where a seller charges each buyer their maximum willingness to pay, capturing all potential consumer surplus.

Perfectly Price Discriminates

A pricing strategy where a seller charges the maximum possible price for each unit consumed that the buyer is willing to pay, capturing the entire surplus.

Consumer Surplus

The variance between the aggregate amount consumers intend and have the means to pay for a good or service and the sum they actually pay.