GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Specialization reduces scarcity
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a. Specialization reduces the cost of production.
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a. Specialization increases the demand for a product.
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a. Specialized workers are generally more highly educated.
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Detailed explanation-1: -The more they focus on one task, the more efficient they become at this task, which means that less time and less money is involved in producing a good. Or put another way, the same time and the same money allows for the production of more goods.
Detailed explanation-2: -Specialization is important because it greatly improves productivity – the ratio of inputs to outputs. The typical example is the assembly line. Producing goods on an assembly line increases productivity because multiple tasks can happen simultaneously and just when they are needed.
Detailed explanation-3: -Specialization can increase productivity and provide a comparative advantage for a firm or economy. Microeconomic specialization involves the individual actors and economic components, and macroeconomic specialization involves the broad advantage an economy holds in production.
Detailed explanation-4: -Specialization occurs as a result of comparative, not absolute, advantage. Specialization according to comparative advantage minimizes opportunity costs.
Detailed explanation-5: -The advantage of specialisation is that a greater output can be produced from a given quantity of inputs. This does not solve the problem of scarcity, but it does have the advantage of making production more efficient than would otherwise be the case. The scarce resources are therefore being put to a better use.