Exam 2: Some Tools of the Economist

If the Internet makes it easier for sellers to find buyers and makes it easier for buyers to learn about the products that are available for sale, we would expect that

Which of the following best describes the implications of the law of comparative advantage? If each person sells goods for which he or she has the greatest comparative advantage in production and buys those for which his or her comparative advantage is least, the

A point outside the production possibilities curve represents a combination of goods that is

With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?

Figure 2-2 Which of the following would most likely cause the production possibilities curve for breadfruit and fish to shift outward from AA to BB in Figure 2-2?

The number of cattle slaughtered every year for meat far exceeds the number of elephants slaughtered every year for their ivory. Despite this, cows can be found everywhere while elephants are on the verge of extinction in some countries. Which of the following best explains this difference?

When an economy is operating efficiently, the production of more of one good will result in the production of less of some other good because

Which of the following most accurately states the economic significance of exchange?

Which of the following is true of exchange?

The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called

(I) When individuals engage in a voluntary exchange, both parties are made better off. (II) By channeling goods and resources to those who value them most, trade creates value and increases the wealth created by a society's resources.

Which of the following activities describes the opportunity cost of watching a play in a theater?

"Now that Blake paints the broad surfaces and I do the trim work, we can paint a house in three-fourths the time that it took for each of us to do both." This statement most clearly reflects

The following question(s) relate(s) to the material in the addendum to Chapter 2. Use the production possibilities data for Lebos and Slavia below to answer the question(s). Table 2-4 Refer to Table 2-4. Which of the following is correct?

Economic analysis suggests that gains from specialization and exchange

When private ownership rights are well-defined and enforced, owners

Mark and John are 10-year-old twins who do not get along. They have opened separate lemonade stands and are competing with each other, selling lemonade on their block. Their mother observes that Mark is very good at making lemonade and John is an excellent young salesman. She suggests they both could make more money if they worked together. John counters that two stands will always make more money than one. Who is right? Why?

In a market economy,

Statistical data provided by the U.S. Department of Transportation shows that the median income of individuals traveling on the nation's bus systems is $18,000 compared to $65,000 for those who normally travel by air. This finding is best explained by which of the following statements?

Entrepreneurs are