Which of the Following Is a Good Example of Efficient

question 204

Multiple Choice

Which of the following is a good example of efficient specialization and voluntary exchange?

• A)A college professor hires someone to rototill his or her garden to ready it for spring planting.
• B)A college professor works on the engine of a car for a neighbor who is a mechanic.
• C)A lawyer decides to babysit his or her young child and agrees to do so for others for cash.
• D)A physician agrees to help a neighbor work on his or her income tax return in exchange for his or her bookkeeping services.

---

Definitions:

Total Cost

The sum of all expenses incurred in the production and delivery of a product or service, including fixed and variable costs.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Total Revenue

The total amount of money generated by the sale of goods or services before any expenses are subtracted.

Fixed Cost

Expenses that do not vary with the level of production or sales, such as rent or salaries.