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

If opportunity costs are constant, the production possibilities frontier would be graphed as

Table 2.1 Production choices for Tomaso's Trattoria Choice Quantity of Pizzas Produced Quantity of Calzones Produced A 48 0 B 36 15 C 24 30 D 12 45 E 0 60 -Refer to Table 2.1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

________ opportunity cost implies that as more resources are applied to producing one good, that production increases by smaller and smaller amounts.

Rayburn Reed is a highly talented photographer.He has chosen to specialize in photography because of all of the following except

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 Pakistan?

All of the following countries come close to the free market benchmark except

An organization of producers that limits the amount of a good produced is known as a

Figure 2.1 -Refer to Figure 2.1.Point A is

In a production possibilities frontier model, a point ________ the frontier is productively inefficient.

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

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

What is meant by the term "free market"?

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)a decrease in the unemployment rate b)general technological advancement c)an increase in consumer wealth Which of the events listed above could cause a movement from V to W?

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

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

A production possibilities frontier with a bowed outward shape indicates

Entrepreneurs bring together the factors of production to produce goods and services.

Figure 2.10 -Refer to Figure 2.10.One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F.Who are economic agents E and what is market F?

Table 2.1 Production choices for Tomaso's Trattoria Choice Quantity of Pizzas Produced Quantity of Calzones Produced A 48 0 B 36 15 C 24 30 D 12 45 E 0 60 -Refer to Table 2.1.Assume Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.

The slope of a production possibilities frontier