The Greater the Degree of Specialization in the Economy,the

question 133

Multiple Choice

The greater the degree of specialization in the economy,the:

• A)easier it is to discover a double coincidence of wants.
• B)more feasible is a barter system.
• C)less likely it is that monetary exchange will develop.
• D)harder it is to negotiate an exchange rate between all pairs of goods.
• E)more likely it is that individual consumers are self-sufficient.

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Definitions:

Diminishing Returns

A principle stating that after a certain point, additional investment or effort yields progressively smaller increases in output.

Marginal-cost Curve

The marginal-cost curve represents how the cost of producing one additional unit of a good changes as its production volume varies.

Marginal Product

The additional output that is generated by employing one more unit of a specific input, ceteris paribus.

Total Fixed Cost

The sum of all expenses that remain constant regardless of the level of production or output within a business.