Exam 2: Some Tools of the Economist

Suppose a country attempts to be self-sufficient and doesn't trade with any other countries.  From an economic perspective, citizens of this nation can be expected to

Compared to a situation where transaction costs are zero, the existence of transaction costs

Figure 2-7 If an economy operates at point A on the production possibilities curve shown in Figure 2-7,

With voluntary exchange,

Market economies are often criticized for how they answer the basic question, "For whom are goods produced?" This criticism usually comes from people who believe that the distribution of income is not "fair." Is there some way to separate production from distribution so that we can leave production just as it is but make the distribution of income "fairer"?

If Terrell can produce more bagels in one day than Zori can produce in one day, then

Figure 2-5 In Figure 2-5, which of the following is true?

Figure 2-9 Refer to Figure 2-9. Suppose the economy is producing at point B. Which of the following statements would best explain this situation?

If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who

Use the production possibilities data below for Honduras and Nicaragua to answer the following question(s). Table 2-2 Refer to Table 2-2. Which of the following would be a mutually agreeable rate of exchange?

A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are efficiently utilized. An economy that operates inside this production possibilities curve

For most students attending state universities, the largest cost component of going to college is

Melanie decided to sleep in today rather than attend her 9 a.m. economics class. According to economic analysis, her choice was

In economics, the term for a person who reduces transaction costs by arranging trades for buyers and sellers is

Which of the following is true of exchange?

Creative destruction refers to the process where

Use the table below to choose the correct answer. The table outlines the production possibilities of Robinson Crusoe and Joe Friday. If Crusoe and Friday want to maximize their consumption possibilities,

Figure 2-9 Refer to Figure 2-9. The opportunity cost of obtaining 10 additional toasters by moving from point B to point A is

If a motorist is stranded in front of a pay phone and has only dollar bills, and he ends up buying a quarter from a passerby for $1,

Which of the following is true of a production possibilities curve?