42.Which of the following does not explain why specialization increases output?

A.Specialization capitalizes on differences in ability.

B.Specialization promotes self-sufficiency and independence.

C.Specialization fosters learning by doing.

D.Specialization saves time by eliminating shifting between tasks.

43.A prerequisite of specialization is:

A.a capitalistic economic system.

B.a medium of exchange.

C.free enterprise.

D.competition.

48.The use of a money for exchange:

A.increases the use of barter.

B.reduces consumer sovereignty.

C.decreases the coincidence of wants.

D.encourages more specialization in production.

71.From society's point of view, the economic function of profits is to:

A.equalize incomes.

B.create full employment.

C.provide revenues to pay high wages.

D.direct resources in response to changes in the economy.

81.Command systems in the Soviet Union and pre-reform China failed primarily because of:

A.coordination and incentive problems.

B.greater resource scarcity than in market systems.

C.the failure to accumulate and use capital.

D.the failure to specialize in production.

102.If goods and services flow clockwise in a circular economic flow diagram, then consumption expenditures flow:

A.clockwise and revenues flow clockwise.

B.clockwise and revenues flow counterclockwise.

C.counterclockwise and revenues flow clockwise.

D.counterclockwise and revenues flow counterclockwise.

103.In the circular economic flow diagram, households:

A.make consumption expenditures and pay for land, labor, and capital.

B.make consumption expenditures and receive goods and services.

C.buy resources and receive goods and services.

D.receive revenue and supply resources.