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

The points outside the production possibilities frontier are

If Tanisha can audit more tax returns in one hour than Libby,then Tanisha has an absolute advantage in auditing tax returns.

The recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by

Table 2-4 Production Choices for Dina's Diner Choice Quantity of Sliders Produced Quantity of Hot Wings Produced A 80 0 B 60 25 C 40 50 D 20 75 E 0 100 -Refer to Table 2-4.Assume Dina's Diner only produces sliders and hot wings.A combination of 60 sliders and 25 hot wings would appear

In a two-good,two country world,if one country has an absolute advantage in the production of both goods,it cannot benefit by trading with the other country.

The attainable production points on a production possibility curve are

Figure 2-15 Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. -Refer to Figure 2-15.What is the opportunity cost of producing 1 popsicle in Greenland?

Suppose in the Germany,the opportunity cost of producing a gallon of beer is 5 gallons of wine.In Italy,the opportunity cost of producing a gallon of beer is 3 gallons of wine. a.What is the opportunity cost of producing a gallon of wine for Germany? b.What is the opportunity cost of producing a gallon of wine for Italy? c.Which country has a comparative advantage in the production of beer? d.Which country has a comparative advantage in the production of wine?

What is meant by the term "free market"?

Which of the following are represented by the same flow in the circular flow model?

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

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 negative technological change in plastic production.

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew is a factor of production.

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 pound of cashews in Pakistan?

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

Table 2-30 Wristvitteh Rice (bushels) Japan 200 hours 10 hours Thailand 180 hours 6 hours -Refer to Table 2-30.This table shows the number of labor hours required to produce a wristwatch and a bushel of rice in Japan and Thailand. a.Which country has an absolute advantage in the production of wristwatches? b.Which country has an absolute advantage in the production of rice? c.What is Japan's opportunity cost of producing one wristwatch? d.What is Thailand's opportunity cost of producing one wristwatch? e.What is Japan's opportunity cost of producing one pound of rice? f.What is Thailand's opportunity cost of producing one pound of rice? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce wristwatches? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce rice?

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 Tahiti?

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.Does either China or South Korea have an absolute advantage and if so,in what product?

Without technological advancement,how can a nation achieve economic growth?

Suppose your expenses for this term are as follows: tuition: $28,000,room and board: $9,000,books and other educational supplies: $2,500.Further,during the term,you can only work part-time and earn $16,000 instead of your full-time salary of $42,000.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?