Exam 2: The Production Possibility Model, Trade, and Globalization

Which of the following is an example of the law of one price in action?

The term efficiency involves achieving a goal as:

If a country has a comparative advantage in the production of a good, its resources are better suited to the production of that good than are the resources of other countries.

When you produce cars, it is enormously expensive to produce one car, but ultimately the costs per car decrease as more are produced. This would be an example of:

The production possibility curves of two countries are given below: Refer to the production possibility curves of the two countries. Without trade, the most each country could produce would be:

The production possibility model can be used to demonstrate the concept of opportunity cost.

The text argues that the United States has had a comparative advantage in goods and services that:

An economy that operates inside its production possibility curve is less efficient than it would be if it were operating on its production possibility curve.

Refer to the graph below. In which curve does the opportunity cost of an additional unit of good Y decrease as more units of good Y are produced?

Refer to the graphs shown. The discovery of a new supply of resources used only in the production of guns can be shown by which shift?

England has a relatively cool and cloudy climate that is ill suited for grape growing. It can produce 200 units of wine for every 400 units of cloth. Portugal, in contrast, has a relatively warm and sunny climate that is good for growing grapes. It can produce 200 units of wine for every 100 units of cloth. Which country has the higher opportunity cost of producing cloth?

A resource is said to have a comparative advantage if:

If a production possibility curve representing a trade-off between a grade in English and a grade in math has a negative slope, we know that:

If the quantity demanded for a good rises as the price falls, the curve representing this relationship will be:

Suppose that in Slovakia one unit of labor can produce either 16 tons of wheat or 32 tons of soy and in Poland one unit of labor can produce either 4 tons of wheat or 2 tons of soy. Given this information, which of the following statements is true?

Refer to the production possibility curve for Ricardia below. The graph indicates that with the resources and technology it has available, Ricardia:

In the linear equation y = mx + b, an increase in b will:

If the hourly wage of U.S. workers is $16, the hourly wage of Mexican workers is $2, and U.S. workers produce 9 times as much output per hour as Mexican workers, then, all else equal, it would be efficient to locate production facilities in:

Refer to the graph shown. In the graph, the opportunity cost of good X in terms of good Y is:

Given the production possibility tables for the First and Second Bakeries shown, we know that the opportunity cost of producing cookies: