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

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

Figure 2-18 -Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: Myrna earns $450 for working at HempHill's Drug Store.

Figure 2-9 -Refer to Figure 2-9. Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier?

What causes a production possibilities frontier to shift outward?

Table 2-21 -Refer to Table 2-21. This table shows the number of labor hours required to produce a digital camera and a bushel of wheat in China and South Korea. a. Which country has an absolute advantage in the production of digital cameras? b. Which country has an absolute advantage in the production of wheat? c. What is China's opportunity cost of producing one digital camera? d. What is South Korea's opportunity cost of producing one digital camera? e. What is China's opportunity cost of producing one bushel of wheat? f. What is South Korea's opportunity cost of producing one pound of wheat? g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce digital cameras? h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce wheat?

Any output combination inside a production possibilities frontier is associated with unused or underutilized resources.

Which of the following is not a flow in the circular flow model?

Figure 2-12 Figure 2-12 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-12. What is the opportunity cost of producing one gallon of honey in Tahiti?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4. A movement from ________ could occur because of an influx of immigrant labor.

________ behavioral assumption about humans was that people usually act in a rational, self-interested way.

Figure 2-18 -Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: Dorian Gray hires "Wild Oscar," a professional portrait artist, to paint his picture.

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier.

The opportunity cost of taking a semester-long economics class is

The basis for trade is comparative advantage, not absolute advantage.

An example of a factor of production for Dell is

Without technological advancement, how can a nation achieve economic growth?

On a diagram of a production possibilities frontier, economic decline (negative growth) is represented by the production possibilities frontier shifting inward.

The production possibilities frontier model shows that

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 response to changing consumer demands, Tesla cuts back on the production automobile batteries and increases its production of Powerwall batteries. This strategy is best represented by the