Exam 2: Trade-Offs, Comparative Advantage, and the Market System

Table 2-19 Table 2-19 shows the output per month of two people, Wilma and Betty. They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-19. What is Wilma's opportunity cost of making a statue?

Figure 2-6 -Refer to Figure 2-6. If the economy is currently producing at point D, what is the opportunity cost of moving to point B?

Table 2-4 Production Choices for Dina's Diner -Refer to Table 2-4. Assume Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would appear

Table 2-5 Production choices for Nadia's Neckware -Refer to Table 2-5. Assume Nadia's Neckware only produces ascots and bowties. A combination of 24 ascots and 12 bowties would appear

You have an absolute advantage whenever you

What is a production possibilities frontier? What do points along the frontier represent? What do points inside and outside the frontier represent?

When you purchase a new pair of jeans you do so in the

Figure 2-11 Figure 2-11 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-11. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

List the four broad categories of factors of production.

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4. Consider the following events: a. a decrease in the unemployment rate b. general technological advancement c. an increase in consumer wealth Which of the events listed above could cause a movement from V to W?

On a diagram of a production possibilities frontier, economic growth is represented by the slope of the production possibilities frontier.

The production possibilities frontier model assumes which of the following?

Table 2-14 Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14. If the two countries specialize and trade, who should export guitars?

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2. Assume that Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 21 blankets would appear

Figure 2-5 -Refer to Figure 2-5. If the economy is currently producing at point W, what is the opportunity cost of moving to point Y?

A decrease in population shifts the production possibilities frontier outwards over time.

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

Households ________ final goods and services in the ________ market.

Figure 2-1 -Refer to Figure 2-1. ________ is (are) inefficient in that not all resources are being used.

Table 2-11 Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-11. South Korea has a comparative advantage in the production of