In the Wealth of Nations,Adam Smith Argued That "The Division

question 219

Multiple Choice

In The Wealth of Nations,Adam Smith argued that "the division of labor [specialization] was limited by the extent of the market." (Bracketed remark added.) Which of the following best explains Smith's argument?

• A) Specialization and the firm's moving down its average total cost curve requires that the demand facing the firm is sufficiently large.
• B) Specialization and the firm's moving down its average total cost curve requires the firm to have increasing marginal costs.
• C) Specialization and the firm moving down its average total cost curve requires the government to grant firm's legal monopolies.
• D) Specialization and the firm moving down its average total cost curve will lead to the firm realizing economic losses.

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Definitions:

Latent Learning

The process by which something is learned but not immediately expressed or noticeable until a later time.

Associative Learning

A learning process by which a subject links two stimuli or a behavior and a consequence.

Operant Conditioning

A learning principle where behaviors are modified by the consequences that follow them, with rewards increasing desired actions and punishments reducing their occurrence.

Predictability

The ability to accurately forecast future events or behaviors based on patterns or prior knowledge.