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

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.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 a secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

The slope of a production possibilities frontier

Table 2-8 Table 2-8 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 2-8.China has a comparative advantage in the production of

Table 2-10 Table 2-10 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 2-10.What is Tammi's opportunity cost of bathing a cat?

The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products.

Which of the following statements is true?

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. -Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

Which of the following is a factor of production?

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 15 calzones would appear

Entrepreneurs bring together the factors of production to produce goods and services.

If a brewery wants to raise funds to purchase a new fermenting vat, it does so in the

Figure 2-6 -Refer to Figure 2-6.If the economy is currently producing at point D, what is the opportunity cost of moving to point B?

Table 2-6 Table 2-6 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2-6.Which of the following statements is true?

Table 2-7 Table 2-7 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 2-7.What is Fred's opportunity cost of making a pogo stick?

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?

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

Table 2-5 -Refer to Table 2-5.The Shellfish Shack produces only shrimp and oysters.The table above shows the maximum possible output combinations of the two types of shellfish using all resources and currently available technology. a.Suppose The Shellfish Shack is currently producing at point E.What is the opportunity cost of producing an additional 11,000 pounds of oysters? b.Suppose The Shellfish Shack is currently producing at point E.What happens to the opportunity cost of producing more and more shrimp? Does it increase, decrease, or remain constant? Explain your answer. c.Suppose The Shellfish Shack is currently producing at point B.What happens to the opportunity cost of producing more and more oysters? Does it increase, decrease, or remain constant? Explain your answer. d.Suppose The Shellfish Shack is plagued by a disease which destroys oyster beds but not shrimp habitats.What would happen to its PPF?

Figure 2-10 Figure 2-10 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-10.What is the opportunity cost of producing one gallon of milk in Bora Bora?

Rayburn Reed is a highly talented photographer.He has chosen to specialize in photography because of all of the following except