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

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

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 Minnie's opportunity cost of making a hat?

Figure 2-18 -Refer to Figure 2-18.Which two arrows in the diagram depict the following transaction: Myrna earns $450 for working at HempHill's Drug Store.

Figure 2-17 -Refer to Figure 2-17.One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F.Who are economic agents E and what is market F?

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

Table 2-30 Wristwatch Rice (bushels) Tapan 200 hours 10 hours Thailand 180 hours 6 hours -Refer to Table 2-30.This table shows the number of labor hours required to produce a wristwatch and a bushel of rice in Japan and Thailand. a.Which country has an absolute advantage in the production of wristwatches? b.Which country has an absolute advantage in the production of rice? c.What is Japan's opportunity cost of producing one wristwatch? d.What is Thailand's opportunity cost of producing one wristwatch? e.What is Japan's opportunity cost of producing one bushel of rice? f.What is Thailand's opportunity cost of producing one bushel of rice? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce wristwatches? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce rice?

Table 2-21 Digital Camera Wheat (bushel) China 100 hours 5 hours South Korea 90 hours 3 hours -Refer to Table 2-25.This table shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. a.Which country has an absolute advantage in the production of motorcycles? b.Which country has an absolute advantage in the production of guitars? c.What is Ireland's opportunity cost of producing one motorcycle? d.What is Scotland's opportunity cost of producing one motorcycle? e.What is Ireland's opportunity cost of producing one guitar? f.What is Scotland's opportunity cost of producing one guitar? g.If each country specializes in the production of the product in which it has a comparative advantage,which country should produce motorcycles? h.If each country specializes in the production of the product in which it has a comparative advantage,which country should produce guitars?

A successful market economy requires well defined property rights and

The opportunity cost of taking a semester-long economics class is

Figure 2-1 -Refer to Figure 2-1.________ is (are)technically efficient.

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

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

If a country is producing efficiently and is on the production possibilities frontier,the country can produce more of one good without producing less of the other good.

If a country is producing efficiently and is on the production possibilities frontier,producing more of one good would result in a movement along the frontier.

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

If you can produce more of something than others with the same resources,you have

All of the following are examples of spending on factors of production in the circular flow model except

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 ________ could occur because of additional government restrictions toward allowing immigrant labor.

If Tanisha can audit more tax returns in one hour than Libby,then Tanisha has an absolute advantage in auditing tax returns.

A welding machine is an example of a factor of production if it is being used to produce automobiles.