ECONOMICS
DIVISION OF LABOR AND SPECIALIZATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Joseph is a teacher. He also enjoys working on automobiles. Recently, Joseph has been so busy at his teaching job that he has had no time to work on his car. He decided to pay his friend, Larry, to do some vehicle maintenance for him.What is this type of economic transaction known as?
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Specialization
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Interdependence
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Marginal Analysis
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Voluntary Exchange
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Explanation:
Detailed explanation-1: -Specialization reduces the cost of production. When an individual specializes to produce one good, and then acquires additional desired goods from other specialists, both parties gain as a result of voluntary exchange.
Detailed explanation-2: -How might the purchase decisions of consumers impact a market economy? By buying some products, but not others, consumers might determine what is produced. When consumers buy products, the price of the product might decrease in response. If firms increase the supply of a product, consumers might purchase more.
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