Exam 3: Exchange and Markets

One of the most obvious clues to the relative scarcity of a product in a market economy is:

To specify terms of exchange and facilitate exchange between strangers, a _______ is often used.

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

Recall Application 1, "Candy Cane Makers Move to Mexico for Cheap Sugar," to answer the following questions: -According to the application, the US government protecting the domestic sugar industry by restricting sugar imports causes:

Recall Application 1, "Candy Cane Makers Move to Mexico for Cheap Sugar," to answer the following questions: -According to the application, the US sugar import restrictions hurt:

When there is imperfect competition, the role of government is to take control of production.

Table 3.2 -Consider two individuals, Rose and Sharon, who produce fish and coconuts. Rose and Sharon's hourly productivity are shown in Table 3.2. Which of the following is true?

A market failure could be caused by:

A specialized worker does not spend time switching from one task to another. This is called:

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

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

Suppose Bob can produce more jeans than Joe in a day. Bob has _______ advantage over Joe in sewing jeans.

If a person has a comparative advantage in some activity, she must have an absolute advantage in that activity as well.

A market failure could be caused by:

A contract:

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

The ability of one person or nation to produce a good at a lower resource cost than another is called a(n):

Markets exist:

Suppose a US "World of Warcraft" player's opportunity cost is $8.00 an hour and can collect 25 coins per hour playing in the game. If the player wants to use a shortcut, it would be worthwhile for him to buy virtual coins if the price is:

The principles of comparative advantage and specialization apply to trade between countries.