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

Figure 2-1 -Refer to Figure 2-1.________ is (are)inefficient in that not all resources are being used.

Table 2-16 One Cell Phone Lumber (per board foot) Estonia 40 hours 8 hours Finland 16 hours 4 hours Table 2-16 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-16.What is Finland's opportunity cost of producing one board foot of lumber?

In 18th century Europe,governments gave guilds legal authority to limit production of goods.This authority obstructed the market mechanism because the guild's actions prevented the forces of ________ from coordinating the self-interested decisions of producers and consumers.

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 X?

If a country produces only two goods,then it is not possible to have an absolute advantage in the production of both those goods.

Figure 2-9 -Refer to Figure 2-9.Carlos Vanya grows tomatoes and strawberries on his land.A portion of his land is more suitable for growing tomatoes and the other portion is better suited for strawberry cultivation.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-13.What is the opportunity cost of producing one gallon of honey in Bora Bora?

For each surfboard that Australia produces,it gives up the opportunity to make 25 boomerangs.New Zealand can produce 1 surfboard for every 15 boomerangs it produces.Which of the following is true about the comparative advantage between the two countries?

Izzy Amador is a highly talented tattoo artist.She has chosen to specialize in tattoo art because of all of the following except

An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier.

Table 2-20 One Wristwatch Rice (per pound) Japan 50 hours 2 hours Thailand 30 hours 1.5 hours Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20.Japan has a comparative advantage in the production of

Figure 2-10 -Refer to Figure 2-10.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

Table 2-13 Tammi Horace Dogs Groomed 20 12 Cats Bathed 10 8 Table 2-13 shows the output per day of two pet groomers, Tammi and Horace.They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-13.Which of the following statements is true?

If the best lawyer in town is also the best at operating a word processor,then according to economic reasoning,this person should

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

An outward shift of a nation's production possibilities frontier can occur due to

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.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

The basis for trade is comparative advantage,not absolute advantage.

The Great Depression of the 1930s with a large number of workers and factories unemployed would be represented in a production possibilities frontier graph by

Figure 2-7 Mercedes Benz recently decided to introduce its B-class automobile in the U.S.market, an electric car that is has designed and developed in a partnership with Tesla Motors.Assume Mercedes Benz chooses to produce both electric-engine vehicles and gasoline-engine vehicles.Figure 2-7 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Assume a technological advancement greatly reduces the cost to produce electric-engine vehicles.This is best represented by the