Statement I: Adam Smith Argued That Specialization Enabled Workers to Get

question 45

Multiple Choice

Statement I: Adam Smith argued that specialization enabled workers to get good at their jobs and that mass production would enable specialized and expensive equipment to be used.
Statement II: Parkinson's Law states that work expands so as to fill the time available for its completion.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

AVC

Average Variable Cost; the total variable costs divided by the number of units produced, indicating the variable expense per unit of output.

MP

Marginal Product, which refers to the increase in output that results from employing an additional unit of input, holding all other inputs constant.

Average Fixed Cost

Average Fixed Cost refers to the total fixed costs (costs that do not change with the level of output) divided by the quantity of output produced. It decreases as production increases.

Total Variable Cost

The total of expenses that vary directly with the level of production, such as raw materials and direct labor.