Specialization

Which of the following is FALSE:

• Specialization increases the variety of goods available.

• Specialization decreases individual productivity.

• Specialization encourages innovation.

• Specialization creates highly skilled workers.

Trade generally gets harder as the market size increases.

• True

• False

How does a larger market size improve trade? (Circle ALL that apply)

• There are more opportunities for specializing.

• Goods are produced locally

• It is easier to find someone to trade with.

• Preferences are more diverse

• Less transportation is required

What makes countries wealthy?

• the division of labor and specialization

• a large military

• a large labor force

• a trade surplus

Which two actions will a country most likely take when it has plenty of iron ore, but it needs aluminum?

• It will specialize in steel production and forgo for aluminum.

• it will specialize in steel production and trade for aluminum.

• it will decrease steel production and bargain for aluminum.

• it will outsource steel production and negotiate for aluminum.

What's the difference between specialization and division of labor?

• There is no difference as they both mean the same thing

• Specialization is more general and division of labor is more specific

• Division of labor refers to workers perform specific tasks and specialization pertains more to firms and/or workers doing only one job

• Division of labor refers to firms and specialization refers to individuals