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

A guild is

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days. This statement suggests that

a. Draw a production possibilities frontier for a country that produces two goods, wine and cheese. Assume that resources are not equally suited to both tasks. b. Define opportunity costs. c. Use your production possibilities frontier graph to demonstrate the concept of opportunity costs.

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 ________ is the result of additional government restrictions on the pollution that results from plastic 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. an increase in the unemployment rate b. general technological advancement c. a decrease in consumer wealth Which of the events listed above could cause a movement from X to V?

Table 2-20 Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20. Does either Japan or Thailand have an absolute advantage and if so, in what product?

Why are music, television, and movie companies concerned about their products being posted to Internet Web sites such as YouTube?

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. If the two countries specialize and trade, who should export cell phones?

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 50 sliders and 50 hot wings would appear

If Abigail can make more candles in one day than Pierre, then Abigail has an absolute advantage in making candles.

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. Which country has a comparative advantage in the production of milk?

Adam Smith's invisible hand refers to

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. Does either Guatemala or Honduras have an absolute advantage and if so, in what product?

Table 2-10 Table 2-10 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2-10. What is Barney's opportunity cost of making a unicycle?

Which of the following are represented by the same flow in the circular flow model?

Comparative advantage means

Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?

In economics, the term "free market" refers to a market where products are traded but not sold.

The ability to exercise control over one's own resources within the confines of the law refers to

How do firms and households interact in markets?