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

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-2. What is the opportunity cost of one dozen roses?

Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures.If she now performs 35 manicures and 70 pedicures,what is the opportunity cost of performing an additional 15 manicures?

Adam Smith,the father of modern economics wrote in his book,An Inquiry into the Nature and Causes of the Wealth of Nations,"It is not from the benevolence of the butcher,the brewer,or the baker,that we expect our dinner but from their regard to their own interest." Explain what he meant by that statement and how such behavior promotes the wealth of a nation.

When a celebrity has the desire to have his image protected following his death,this is best described as an example of the protection of

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4. A movement from ________ is the result of advancements in plastic production technology.

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-2. Suppose Vidalia is currently producing 20 dozen orchids per period.How many roses is it also producing,assuming that resources are fully utilized?

An example of a factor of production is

Table 2-4 Table 2-4 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-4.Does either Estonia or Finland have an absolute advantage and if so,in what product?

In a simple circular flow diagram,who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?

Table 2-3 Table 2-3 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-3.What is Jack's opportunity cost of cultivating a garden?

On a diagram of a production possibility frontier,opportunity cost is represented by the slope of the production possibility frontier

Which of the following statements about an entrepreneur is true?

In the circular flow model,households

If a country is producing efficiently and is on the production possibilities frontier,the only way to produce more of one good is with an advance in technology.

Figure 2-6 General Motors recently approved for production the Cadillac Converj, an electric car based on its Chevy Volt. The Converj will feature a "Generation 1.5 Voltec" powertrain, with a hybrid engine that runs on a combination of electricity and gasoline. Suppose GM chooses to produce both a coupe version and an SUV version of this hybrid-engine vehicle for its Cadillac brand. Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-6.Suppose worker productivity increases so that the total number of vehicles produced increases as the company adds more machinery,workers and changes the layout of the factory.This is best represented by the

The idea underlying Adam Smith's "invisible hand" is that people tend to behave in ways that go unnoticed in society.

A critical function of the government in facilitating the operation of a market economy is

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-2. The linear production possibilities frontier in the figure indicates that

Izzy Amador is a highly talented tattoo artist.She has chosen to specialize in tattoo art because of all of the following except