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

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.

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

What is an entrepreneur?

What is a production possibilities frontier? What do points along the frontier represent? What do points inside and outside the frontier represent?

Comparative advantage means the ability to produce a good or service

The points outside the production possibilities frontier are

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

In a report made to the U.S.Congress in 2001, the National Academy of Sciences cautioned that if fuel economy encourages the production of smaller and lighter cars, "Some additional traffic fatalities would be expected." This statement suggests that

If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the

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

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

If additional units of a good could be produced at an increasing opportunity cost, the production possibilities frontier would be linear.

A major factor contributing to the slow growth rate of less-developed economies is

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place 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.What is the opportunity cost of one pound of meat?

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 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.Does either Guatemala or Honduras have an absolute advantage and if so, in what product?

Any output combination outside a production possibilities frontier is associated with unused or underutilized resources.

The opportunity cost of going to an outdoor music festival is

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?