When People Specialize in the Activity in Which They Have

question 40

Multiple Choice

When people specialize in the activity in which they have a comparative advantage,

• A)there cannot be a division of labor, though production will increase.
• B)there will likely be a division of labor as well as an increase in output.
• C)there will be a gain from trade, but production will not be increased.
• D)there will likely be a division of labor, and output will stay the same.
• E)there will likely be a division of labor, and output will decline.

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Definitions:

English Parliament

The supreme legislative body in the United Kingdom, made up of the House of Commons, the House of Lords, and the Sovereign.

Act for the Prevention of Frauds and Perjuries

Historical legislation which aimed at reducing fraud and perjury in legal agreements, emphasizing the importance of written contracts.

Promissory Estoppel

The legal enforcement of an otherwise unenforceable contract due to a party’s detrimental reliance on the contract.

Negligent Misrepresentation

A false statement of material fact made by a party who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.