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

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 patent protection period to 75 years b.a hurricane that destroys a substantial portion of a nation's capital stock c.the implementation of a secure and enforceable property rights system Which of the events listed above could cause a movement from W to Z?

When you purchase a new surfboard you do so in the

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ is the result of additional government restrictions on the pollution that results from plastic production.

Table 2-10 Fred Barney Pogo Sticks 24 28 Unicycles 8 14 Table 2-10 shows the output per month of two people, Fred and Barney.They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2-10.What is Fred's opportunity cost of making a pogo stick?

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

If a vineyard wants to raise funds to purchase a new bottling machine,it does so in the

An outward shift of a nation's production possibilities frontier represents

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.What is Horace's opportunity cost of grooming a dog?

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

Figure 2-8 Figure 2-8 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-8.Suppose Vidalia is currently producing 60 dozen orchids per period.How many roses is it also producing,assuming that resources are fully utilized?

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.If the two countries specialize and trade,who should export digital cameras?

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

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days.This statement suggests that

If opportunity costs are ________,the production possibilities frontier would be graphed as a negatively sloped straight line.

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

The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources.

If the best surgeon in town is also the best at cleaning swimming pools,then according to economic reasoning,this person should

As women's wages have risen relative to men's wages,the opportunity cost to women of doing housework has ________ than has the opportunity cost to men.

Table 2-8 Possible Output Combinations Cashews (thousands of pounds) Almonds (thousands of pounds) A 35 0 B 30 20 C 25 35 D 20 47 E 15 57 F 10 64 G 5 68 H 0 70 -Refer to Table 2-8.The Nut House produces only cashews and almonds.The table above shows the maximum possible output combinations of the two nuts using all resources and currently available technology. a.Graph The Nut House's production possibilities frontier.Put almonds on the horizontal axis and cashews on the vertical axis.Be sure to identify the output combination points on your diagram. b.Suppose The Nut House is currently producing at point C.What is the opportunity cost of producing an additional 12,000 pounds of almonds? c.Suppose The Nut House is currently producing at point C.What happens to the opportunity cost of producing more and more almonds? Does it increase,decrease or remain constant? Explain your answer. d.Suppose The Nut House is currently producing at point F.What happens to the opportunity cost of producing more and more cashews? Does it increase,decrease or remain constant? Explain your answer. e.Suppose The Nut House is plagued by a variety of white root-rot disease,which destroys cashew trees but not almond trees.Show in a graph what happens to its PPF.

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