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

Table 2-5 -Refer to Table 2-5. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. a.Which country has an absolute advantage in the production of cell phones? b.Which country has an absolute advantage in the production of lumber? c.What is Estonia's opportunity cost of producing one cell phone? d.What is Finland's opportunity cost of producing one cell phone? e.What is Estonia's opportunity cost of producing one board foot of lumber? f.What is Finland's opportunity cost of producing one board foot of lumber? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce cell phones? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce lumber?

If a vineyard wants to raise funds to purchase a new bottling machine,it does so in the

________ shows that if all resources are fully and efficiently utilized,more of one good can be produced only by producing less of another good.

Which of the following is an examples of spending on factors of production in the circular flow model?

Consider a country that produces only two goods: pineapples and tractors.Suppose it is possible for this country to increase its production of pineapples without producing fewer tractors.In this case,its current output combination is inefficient.

A stand of redwood trees is not an example of a factor of production but the harvested and processed redwood is a factor of production.

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.What is Finland's opportunity cost of producing one board foot of lumber?

Figure 2-11 -Refer to Figure 2-11. Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

Figure 2-5 -Refer to Figure 2-5. If the economy is currently producing at point Y,what is the opportunity cost of moving to point X?

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 50 hot wings would appear

A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced.

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

Figure 2-8 -Refer to Figure 2-8. In the circular flow diagram,market K represents

In the circular flow model,households demand resources such as labor services in the product market.

Figure 2-7 Figure 2-7 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. -Refer to Figure 2-7.What is the opportunity cost of producing 1 ton of pineapples in Guatemala?

________ behavioral assumption about humans was that people usually act in a rational,self-interested way.

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Dina faces ________ opportunity costs in the production of sliders and hot wings.

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 George's opportunity cost of cultivating a garden?

In a production possibilities frontier model,a point inside the frontier is

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 Cadillac has to shut down a portion of its facility as it works on remodeling the facility to merge two of its separate assembly lines in preparation for the production of the new,hybrid models.The production decision to shut down temporarily will result in a