Exam 3: Exchange and Markets

In a market system profits:

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots. Based on the table, Willy's opportunity cost of 1 carrot is:

Suppose a car is completely produced and assembled in Germany and is sold to the United States. In this example, if the United States restricts the purchase of the car from Germany, then the country whose overall welfare would be reduced by this policy would be:

The market system works by getting each person, motivated by his or her own self- interest, to produce products for other people.

Suppose that in the time it takes for him to bake a cake, Bob can produce sew 5 pairs of jeans. In the time it takes for Joe to bake a cake, he can produce sew 8 pairs of jeans day. In this example, who has the absolute advantage in baking a cake?

Table 3.3 -Consider two individuals, Bob and Jerry, who produce guitars and banjos. Bob and Jerry's weekly productivity are shown in Table 3.3. Which of the following is true?

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses. In response, entrepreneurs would:

Recall Application 2, "Gold Farming for World of Warcraft," to answer the following questions: -According to the application, the purchase of virtual gold coins were done by online gamers who had:

A public good is any good that is produced by the government.

When the market does not produce the most efficient outcomes, it is known as:

An individual or country that has a comparative advantage in the production of one good:

During World War II, trade among camps caused the price of beef in camps with mainly Sikh prisoners who did not eat beef to:

Suppose a product suddenly loses popularity and the firms producing the product begin to realize large losses. As firms exit the market, the equilibrium price in the market will

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots. From the table, we can conclude that:

If Tom can produce 20 multiple choice questions or 30 true/false questions in an hour, and Mary can produce 15 multiple choice questions or 15 true/false questions in an hour, then Tom has a comparative advantage in writing multiple choice questions.

Producer A has a comparative advantage over Producer B if, in producing a good:

Imagine two countries, Bruceland and Davidia. Bruceland is producing everything at a lower absolute cost than Davidia. If the two countries trade what is the reason?

The reason why the government taxes the gasoline used by pollution- causing automobiles is because it is trying to:

Recall Application 1, "Candy Cane Makers Move to Mexico for Cheap Sugar," to answer the following questions: -According to the application, even though about 90% of the worlds candy canes are consumed in the US and domestic producers dominated the market, domestic producers moved production to Mexico because:

Table 3.3 -Consider two individuals, Bob and Jerry, who produce guitars and banjos. Bob and Jerry's weekly productivity are shown in Table 3.3. Which of the following is true?