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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An economy of 25 million people has twenty percent of them engaged in research and development, where their productivity is 0.0056. The economy is on a balanced growth path, when suddenly a wave of immigration raises the population to 27 million
Assume that the new workers are immediately "on the job," and that the fraction engaged in R&D remains twenty percent. For the one period that begins with this population increase, the growth rate of output per person is ________. [Refer to the instruction above.] A) 4.3% B) 1.8% C) 3% D) 8%
Keynesians identify three principal motives for demanding money. They are the:
A. transactions demand, precautionary demand, and liquidity motive. B. transactions demand, precautionary demand, and convertibility motive. C. transactions demand, speculative demand, and volatility motive. D. transactions demand, speculative demand, and precautionary demand.