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

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 Horace's opportunity cost of bathing a cat?

Which of the following are separate flows in the circular flow model?

Figure 2-7 Tesla opened its Gigafactory near Sparks, Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products. Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions. -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?

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

Figure 2-11 -Refer to Figure 2-11.One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J.What is market K and who are economic agents J?

Households ________ final goods and services in the ________ market.

Figure 2-12 -Refer to Figure 2-12.One segment of the circular flow diagram in the figure shows the flow of goods and services from market C to economic agents A.What is market C and who are economic agents A?

Any output combination along a production possibilities frontier is associated with fully utilized resources.

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 Tahiti?

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

In the circular flow model, producers

If additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be bowed outward (concave).

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 W?

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.South Korea has a comparative advantage in the production of

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-9.Which country has a comparative advantage in the production of cotton?

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

Tesla Motors manufactures its cars at a plant in Fremont, California.At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China.In deciding to open the Fremont plant, Tesla

Figure 2-7 Tesla opened its Gigafactory near Sparks, Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products. Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Assume that in response to changing consumer demands, Tesla cuts back on the production of Powerwall batteries and increases its production of automobile batteries.This strategy is best represented by the

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.

The production possibilities frontier model assumes which of the following?