In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?
A) the relationship between the marginal and average product of labor
B) the law of diminishing returns
C) why no firm would want to hire so many workers as to experience a negative marginal product of labor
D) the division of labor
Answer: D
You might also like to view...
Trade between two nations can benefit both if each specializes in the good that it can produce at a lower opportunity cost.
a. true b. false
If water is essential for life, while diamonds are not, then why is water cheaper than diamonds?
A. Because the marginal utility of water is high but the total utility is low. B. Because the total utility generated by diamonds is larger than the total utility generated by water. C. Because most people do not understand their total need for water. D. Because water is abundant, the marginal utility of water is low, and price reflects marginal utility, not total utility.