Which of the Following Most Accurately States the Economic Significance

question 146

Multiple Choice

Which of the following most accurately states the economic significance of exchange?

• A) Physical goods have value because they exist; exchange can neither increase nor decrease their value.
• B) Exchange creates value by permitting trading partners to expand total output as the result of specialization in areas where they have a comparative advantage.
• C) Exchange creates value by moving goods from people who value the goods less to people who value the goods more.
• D) Both b and c are true.

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Definitions:

Social Loafing

The dynamic wherein teamwork leads to a decrease in individual effort applied towards achieving objectives, in contrast to independent work.

Groupthink

A psychological phenomenon in which people striving for consensus within a group fail to consider alternatives, leading to a dysfunctional decision-making outcome.

Social Facilitation

The tendency for people to perform differently, usually better, when in the presence of others than when alone.

Social Loafing

Social loafing is the phenomenon observed when individuals exert less effort to achieve a goal when they work in a group than when they work alone.