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

Which of the following is an example of spending on goods and services in the circular flow model?

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.What is Haley's opportunity cost of making a bracelet?

The resource income earned by those who supply ________ is called wages.

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 30 calzones would appear

Figure 2-14 -Refer to Figure 2-14.Identify the two arrows in the diagram that depict the following transaction: LaDonna sells 20 pairs of sunglasses at the Oakley store.

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.If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

An example of a factor of production is

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 5 pillows and 21 blankets would appear

Suppose your expenses for this term are as follows: tuition: $12,000, room and board: $6,500, books and other educational supplies: $1,500.Further, during the term, you can only work part-time and earn $3,500 instead of your full-time salary of $14,000.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?

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 80 dozen orchids?

Table 2-16 -Refer to Table 2-12.This table shows the number of labor hours required to produce a digital camera and a bushel of wheat in China and South Korea. a.Which country has an absolute advantage in the production of digital cameras? b.Which country has an absolute advantage in the production of wheat? c.What is China's opportunity cost of producing one digital camera? d.What is South Korea's opportunity cost of producing one digital camera? e.What is China's opportunity cost of producing one bushel of wheat? f.What is South Korea's opportunity cost of producing one pound of wheat? g.If each country specializes in the production of the product in which it has a comparative advantage, who should produce digital cameras? h.If each country specializes in the production of the product in which it has a comparative advantage, who should produce wheat?

On a diagram of a production possibilities frontier, opportunity cost is represented by the production possibilities frontier shifting outward.

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

Which of the following is not a factor of production?

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.What is South Korea's opportunity cost of producing one digital camera?

All of the following are examples of spending on goods and services in the circular flow model except

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.Suppose Mendonca is currently producing 60 pounds of vegetables per period.How much meat is it also producing, assuming that resources are fully utilized?

What is the difference between product markets and factor markets?

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

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.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?