Explain how comparative advantage, specialization and division of labor are related
What will be an ideal response?
Comparative advantage is the ability to perform an activity at a lower opportunity cost. Specialization involves the organization of economic activity among different individuals and regions. Most individuals do specialize based on their comparative advantage. The division of labor refers to the segregation of a workers into different specific tasks. The division of labor occurs when resources specialize into specific tasks. Total output is greater when resources are specialized.
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Most food products have low income and price elasticities of demand
Indicate whether the statement is true or false
Everything else held constant, which of the following does NOT cause aggregate demand to increase?
A) an increase in net exports B) an increase in government spending C) an increase in taxes D) an increase in consumer optimism