Question

33 Price elasticity of demand is generally: out of Select one: O a. greater in the short run than in the long run. b. the same in both the short run and the long run. c. greater in the long run than in the short run. d. greater for "necessities" than it is for "luxuries." 34 Which of the following statements is true about the advantages gained through the division of labour? Select one: out of a. It was first thought of by David Ricardo in his example of a hat factory. b. It is an idea that has little application in the real world. c. It causes the marginal product of labour to increase, but it has no effect on the average product of labour. d. Its application results in both the marginal and average product of labour increasing. 35 Both the total product and marginal product fall when diminishing return starts. aved aut of Select one: Tauro

Answer 1

Ans1.) OPTION (C) Greater in the long run than in the short run

Reason :- Price elasticity of demand is generally greater in the long run than in the short run because the smaller the share of an item in one's budget, the more price inelastic demand is likely to be. Habits that are difficult to break will cause people orginally to make adaptations to continue same or similar consumption but eventually will not be able to afford it.

Therefore, OPTION (C) is correct.

Ans2.) OPTION (D) Its application results in both the marginal and average product of labour increasing

Reason :- Division of labour helps to increase the efficiency of workers due to two reasons -

i.) Every worker is assigned a job that suits his skills, experience, training and aptitude which leads to higher output.

ii.) Due to division of labour, a worker continuously repeats his work.

These two steps are the advantages of division of labour which results increase in both marginal as well as average product of labour.

Therefore, OPTION (D) is correct.