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

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.Ireland has a comparative advantage in the production of

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 Barney's opportunity cost of making a pogo stick?

Comparative advantage means the ability to produce a good or service

Consider the following items: A.the novel "A Gentleman in Moscow" by Amor Towles B.the "The Spirited Shipper," an innovative wine shipping box C.a Swiss chef's award-winning recipe D.an original fabric design, for example, the fabric used for "Coach" bags and luggage Which of the items listed is an example of intellectual property?

A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier.

The attainable production points on a production possibilities frontier are

You have an absolute advantage whenever you

Each person goes about her daily business seeking to maximize her own self interests.In doing so, she contributes to the welfare of society at large.This is the idea underlying Adam Smith's "invisible hand."

What is an entrepreneur?

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 Serena's opportunity cost of making a necklace?

Which of the following statements about a circular flow model is false?

Figure 2-14 -Refer to Figure 2-14.Identify the two arrows in the diagram that depict the following transaction: Myrna earns $450 for working at HempHill's Drug Store.

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.If the two countries specialize and trade, who should export wheat?

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

Increasing opportunity cost is represented by a ________ production possibilities frontier.

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 unicycle?

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.What is Scotland's opportunity cost of producing one guitar?

Suppose that in 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?

For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese.France gives up the opportunity to produce of 1 bottle of wine for every 25 pounds of cheese it produces.Which of the following is true about the comparative advantage between the two countries?

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.an increase in a nation's money supply C.an influx of immigrant workers Which of the events listed above could cause a movement from X to Z?