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

The payment received by suppliers of entrepreneurial skills is called rent.

Table 2-11 One Digital Camera Wheat (per pound) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-11.What is China's opportunity cost of producing one pound of wheat?

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point X,what is the opportunity cost of moving to point W?

Table 2-5 Production choices for Nadia's Neckware Choice Quantity of Ascots Produced Quantity of Bowties Produced A 32 0 B 24 6 C 16 12 D 8 18 E 0 24 -Refer to Table 2-5.Assume Nadia's Neckware only produces ascots and bowties.A combination of 24 ascots and 12 bowties would appear

Table 2-12 One canoe One Sailboat Guaternala 10 hours 60 hours Monduras 15 hours 75 hours 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?

Which of the following countries does not come close to the free market benchmark?

In the circular flow model,households supply resources such as labor services in the product market.

The ________ demonstrates the roles played by households and firms in the market system.

Suppose your expenses for this term are as follows: tuition: $12,000,room and board: $6,500,books and other educational supplies: $1,500.Further,during the term,you can only work part-time and earn $3,500 instead of your full-time salary of $14,000.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?

Economic decline (negative growth)is represented on a production possibilities frontier model by the production possibility frontier

The idea underlying Adam Smith's "invisible hand" is that people tend to behave in ways that go unnoticed in society.

Figure 2-16 -Refer to Figure 2-16.One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M.What is market K and who are economic agents M?

On a diagram of a production possibility frontier,economic decline (negative growth)is represented by the production possibility frontier shifting inward.

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 movements: a.from point V to point W b.from point W to point Y c.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?

What is a circular flow diagram and what does it demonstrate?

Figure 2-18 -Refer to Figure 2-18.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?

Which of the following would shift a nation's production possibilities frontier outward?

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.an increase 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 Z to V?

Figure 2-12 Figure 2-12 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-12.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of cotton?

What is meant by the term opportunity cost?