Economics Specialization Quiz

Specialization is important in economics because it allows for _____.

• increased efficiency
• More demand

• Decreased efficiency

Specialization can lead to increased productivity by _____.

• focusing on specific tasks
• Creating more goods

The law of demand implies that as the price of a good decreases, the quantity demanded by consumers _____.

• increases
• Decreases

• Stays the same

Market equilibrium is the point where _____.

• supply equals demand
• Demand is higher

• Supply is higher

• Demand stays the same

Comparative advantage is defined as the ability of an entity to produce a good or service at a lower _____ cost than another entity.

• opportunity
• selling

• demand

Comparative advantage promotes trade between countries by allowing them to specialize in the production of goods for which they have a _____.

• lower opportunity cost
• Higher opportunity cost

• selling point

A monopoly is a market structure where a single seller dominates the market, which affects consumer choice by limiting _____.

• competition
• goods

• supply

Government policies can influence market dynamics by affecting (a)   .

Opportunity cost in the context of specialization refers to the cost of forgoing the next best alternative when a country or individual focuses on (a)   .

The potential downsides of specialization for an economy include (a)   .