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

What is the difference between product markets and factor markets?

A major factor contributing to the slow growth rate of less-developed economies is

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 60 sliders and 25 hot wings would appear

If society decides it wants more of one good and all resources are fully utilized, then

If the opportunity cost of producing more of one good increases as more of that good is produced, then the production method is inefficient.

If the production possibilities frontier is linear, then

As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ________, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services, because the cost of these specialists is ________ than the cost of the wife (or husband) performing those chores.

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 Guatemala's opportunity cost of producing one sailboat?

What shape does a production possibilities frontier take if it displays increasing opportunity costs? What shape does a production possibilities frontier take if it displays constant opportunity costs? Which shape is most common in production situations?

If property rights are not well enforced, all of the following are likely to occur except

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. Which of the following statements is true?

Suppose your expenses for this term are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. 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?

Consider a country that produces only two goods: bird feeders and binoculars. Suppose it is possible for this country to increase its production of bird feeders without producing fewer binoculars. In this case, its current output combination is inefficient.

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. Guatemala has a comparative advantage in the production of

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties?

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 Tammi's opportunity cost of grooming a dog?

The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

Adam Smith's behavioral assumption about humans was that people

In a free market there are virtually no restrictions, or at best few restrictions, on how factors of production can be employed.