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

a.Draw a production possibilities frontier for a country that produces two goods, beer and pretzels.Assume that resources are equally suited to both tasks. b.Define opportunity costs. c.Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.

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

A successful market economy requires

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except

Table 2.3 Serena Haley Bracelets 8 9 Necklaces 16 12 Table 2.3 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.3.What is Haley's opportunity cost of making a necklace?

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

In the circular flow model, producers

Households ________ final goods and services in the ________ market.

The principle of opportunity cost is that

Table 2.4 One Digital Camera Wheat (per pound) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2.4 shows the number of labour hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2.4.China has a comparative advantage in the production of

Crude oil is not an example of a factor of production, but when crude oil is processed into gasoline, it is a factor of production.

Figure 2.7 Figure 2.7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

Figure 2.7 Figure 2.7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Figure 2.7 Figure 2.7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 pound of cashews in Indonesia?

Table 2.3 Serena Haley Bracelets 8 9 Necklaces 16 12 Table 2.3 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.3.What is Serena's opportunity cost of making a necklace?

Toyota recently built an assembly plant in Woodstock, Ontario.At this plant, Toyota is able to take advantage of paying lower transportation costs on cars to be sold in Canada than it would from its Japanese assembly plants, but it also sacrifices the ease of supervising its Japanese workers, who generally have high skills levels and few labour disputes.In deciding to open the Woodstock plant, Toyota

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by

An increase in the labour force shifts the production possibility frontier inwards over time.

Adam Smith's behavioral assumption about humans was that people

Which of the following is not a factor of production?