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

Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 pies,what is the opportunity cost of baking an additional 15 cakes?

An example of a factor of production is

Which of the following is a factor of production?

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 Honduras's opportunity cost of producing one sailboat?

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 Estonia's opportunity cost of producing one board foot of lumber?

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 Tammi's opportunity cost of grooming a dog?

Table 2-15 George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-15 shows the output per day of two gardeners, George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-15.What is Jack's opportunity cost of mowing a lawn?

If a country is producing efficiently and is on the production possibilities frontier,producing more of one good would result in a movement along the frontier.

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 economic growth?

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 reduction in the patent protection period to no more than 2 years b.a war that destroys a substantial portion of a nation's capital stock c.the lack of secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

Suppose in Belgium,the opportunity cost of producing a trombone is 8 clarinets.In Denmark,the opportunity cost of producing a trombone is 6 clarinets. a.What is the opportunity cost of producing a clarinet for Belgium? b.What is the opportunity cost of producing a clarinet for Denmark? c.Which country has a comparative advantage in the production of clarinets? d.Which country has a comparative advantage in the production of trombones?

Figure 2-1 -Refer to Figure 2-1.Point A is

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

Table 2-31 Cell Phone Lumber (buard feet) Estonia 20 hours 5 hours Finland 18 hours 4 hours -Refer to Table 2-31.This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. a.Which country has an absolute advantage in the production of cell phones? b.Which country has an absolute advantage in the production of lumber? c.What is Estonia's opportunity cost of producing one cell phone? d.What is Finland's opportunity cost of producing one cell phone? e.What is Estonia's opportunity cost of producing one board foot of lumber? f.What is Finland's opportunity cost of producing one board foot of lumber? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce cell phones? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce lumber?

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.What is the opportunity cost of 100 dozen roses?

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

The ability to exercise control over one's own resources within the confines of the law refers to

Consider the following items: a.the album "21" by Adele b.a Dutch horticulturalist's new method for cultivating hybrid tulips c.Rolls Royce's "Spirit of Ecstacy" hood ornament design d.the sale of Tumi luggage at a Macy's department store. Which of the items listed is an example of intellectual property?

Suppose in Belize,the opportunity cost of producing a sailboat is 5 hang gliders.In Honduras,the opportunity cost of producing a sailboat is 8 hang gliders. a.What is the opportunity cost of producing a hang glider for Belize? b.What is the opportunity cost of producing a hang glider for Honduras? c.Which country has a comparative advantage in the production of hang gliders? d.Which country has a comparative advantage in the production of sailboats?

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