Decentralization of Production Is Appropriate When

question 94

Multiple Choice

Decentralization of production is appropriate when

• A) a product's value-to-weight ratio is high.
• B) the product serves universal needs.
• C) barriers to trade are low.
• D) volatility in key exchange rates is expected.

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Definitions:

Consumption

The use of goods and services by households, constituting one of the primary components of GDP and a fundamental concept in economics signifying final consumption.

Salience

The quality of being particularly noticeable or important; prominence.

Demand

The desire and ability of consumers to purchase goods and services at a given price.

Elastic

Describes a situation in economics where the demand for or supply of a good is sensitive to changes in price, meaning a small change in price leads to a significant change in quantity demanded or supplied.