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

Figure 2-14 Figure 2-14 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. -Refer to Figure 2-14.What is the opportunity cost of producing 1 popsicle in Iceland?

Households

Table 2-14 One Motorcycle One Guitar Treland 20 hours 4 hours Scotland 8 hours 2 hours Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14.What is Scotland's opportunity cost of producing one motorcycle?

Table 2-15 George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-15 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 2-15.What is George's opportunity cost of cultivating a garden?

Table 2-18 Minnie Mickey Hats 40 50 Umbrellas 10 5 Table 2-18 shows the output per week of two people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. -Refer to Table 2-18.What is Mickey's opportunity cost of making an umbrella?

Table 2-20 One Wristwatch Rice (per pound) Tapan 50 hours 2 hours Thailand 30 hours 1.5 hours Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20.If the two countries specialize and trade,who should export rice?

If the production possibilities frontier is ________,then opportunity costs are constant as more of one good is produced.

Table 2-4 Production Choices for Dina's Diner Choice Quantity of Sliders Produced Quantity of Hot Wings Produced A 80 0 B 60 25 C 40 50 D 20 75 E 0 100 -Refer to Table 2-4.Assume Dina's Diner only produces sliders and hot wings.A combination of 60 sliders and 25 hot wings would appear

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 technology with respect to both food and plastic production C.a war that kills a significant portion of a nation's population Which of the events listed above could cause a movement from W to Y?

The term "property rights" refers to

An example of a factor of production is

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

An increase in the labor force shifts the production possibilities frontier inwards over time.

Table 2-20 One Wristwatch Rice (per pound) Tapan 50 hours 2 hours Thailand 30 hours 1.5 hours Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20.What is Thailand's opportunity cost of producing one pound of rice?

Table 2-9 Serena Haley Bracelets 8 9 Necklaces 16 12 Table 2-9 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 2-9.What is Haley's opportunity cost of making a necklace?

Table 2-31 Cell Phone Lumber (board foot) Estonia 20 hours 5 hours Finland 18 hours 4 hours -Refer to Table 2-31.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.If each country has a total of 3,600 labor hours to devote to the production of the two goods,draw the production possibilities frontier for each country.Put "Cell Phone" on the horizontal axis and "Lumber" on the vertical axis.Be sure to identify the intercept values on your graphs. b.Suppose each country allocates 55% its labor hours to lumber production and 45% to the production of cell phones.Complete Table 2-34 below to show each country's output of the two products. Table 2-32: Production and Consumption with no Trade Cell Phone Output Lumber Output (board feet) Estonia Finland Total c.If the two countries do not trade and consume whatever they produce,identify the current production and consumption point for each country on their respective production possibilities frontiers.Label Estonia's consumption point "E" and Finland's consumption point,"F." d.Suppose the two countries specialize and trade.Who should produce cell phones and who should produce lumber? Explain your answer. e.Complete Table 2-35 below to show each country's output with specialization. Table 2-33: Output with Specialization CellPhone Output Lumber Output (board feet) Estonia Finland Total f.Did specialization increase the combined output for the two countries without any increase in resources? If so,by how much? g.Suppose Estonia and Finland agree to trade so that in exchange for 400 board feet of lumber,the exporter of lumber receives 90 cell phones.Complete Table 2-36 below to show each country's consumption bundle after trade. Table 2-34: Consumption with Trade Cell Phone Lumber (boardfeet) Estonia Finland h.Show the consumption points after trade on each country's production possibilities frontier.Label these points "X" for Estonia and "Y" for Finland. i.Has trade made the two countries better off? Explain your answer

Table 2-13 Tammi Horace Dogs Groomed 20 12 Cats Bathed 10 8 Table 2-13 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-13.What is Horace's opportunity cost of grooming a dog?

Economic growth is represented on a production possibilities frontier model by the production possibilities frontier

Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes.If he now produces 30 bird houses and 15 wind chimes,what is the opportunity cost of producing an additional 10 wind chimes?

Table 2-15 George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-15 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 2-15.Which of the following statements is true?