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

Figure 2-8 Figure 2-8 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-8. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production?

Table 2-16 Table 2-16 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-16. Estonia has a comparative advantage in the production of

Table 2-15 Table 2-15 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-15. Which of the following statements is true?

The production possibilities frontier shows

Figure 2-18 -Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: LaDonna sells 20 pairs of sunglasses at the Oakley store.

Table 2-30 -Refer to Table 2-30. This table shows the number of labor hours required to produce a wristwatch and a bushel of rice in Japan and Thailand. a. Which country has an absolute advantage in the production of wristwatches? b. Which country has an absolute advantage in the production of rice? c. What is Japan's opportunity cost of producing one wristwatch? d. What is Thailand's opportunity cost of producing one wristwatch? e. What is Japan's opportunity cost of producing one bushel of rice? f. What is Thailand's opportunity cost of producing one bushel of rice? g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce wristwatches? h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce rice?

If the best lawyer in town is also the best at operating a word processor, then according to the theory of comparative advantage, this person should

Which of the following is an example of spending on factors of production in the circular flow model?

Table 2-13 Table 2-13 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-13. What is Horace's opportunity cost of grooming a dog?

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. an increase in the patent protection period to 30 years b. an increase of a nation's capital stock c. an improved property rights system Which of the events listed above could cause a movement from V to W?

Table 2-12 Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12. What is Honduras's opportunity cost of producing one sailboat?

A critical function of the government in facilitating the operation of a market economy is

The circular flow model demonstrates

Figure 2-7 Tesla opened its Gigafactory near Sparks, Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products. Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions. -Refer to Figure 2-7. Assume that in 2024, Tesla temporarily shuts down part of the Gigafactory for an extensive renovation, and this reduces the amount of production capacity available for both types of batteries. This is best represented by the

Figure 2-14 Figure 2-14 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. -Refer to Figure 2-14. What is the opportunity cost of producing 1 popsicle in Greenland?

Which of the following statements is true?

Table 2-18 Table 2-18 shows the output per week of two people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. -Refer to Table 2-18. What is Minnie's opportunity cost of making an umbrella?

In economics, the term "free market" refers to a market where no sales tax is imposed on products sold.

Figure 2-1 -Refer to Figure 2-1. Point A is

It is not possible to have a comparative advantage in producing a good or service without having an absolute advantage.