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

Two U.S. Senators have introduced a bipartisan bill to strengthen patent protection in the United States. The STRONGER Patents Act, designed to improve the patent system, includes provisions which would permit injunctions to protect patent owners against infringement both during and after court cases and guarantee fairness in administrative proceedings by limiting repetitive and harassing challenges against inventors. Changes over the last decade have lessened some U.S. patent rights, while countries such as China and Germany have moved to strengthen their own patent protections. In 2016, the United States fell to 10th place in the U.S. Chamber of Commerce's international ranking of patent system strength. Source: Brian Pomper, "Senators Coons and Cotton Introduce STRONGER Patents Act of 2017," ipwatchdog.com, June 21, 2017. -Refer to the Article Summary.If the STRONGER patents Act of 2017 becomes law,all of the following would most likely occur except

All of the following are critical functions of the government in facilitating the operation of a market economy except

In a two-good,two country world,if one country has a comparative advantage in the production of one good,it can benefit by trading with the other country.

Increasing opportunity cost along a bowed-out production possibilities frontier occurs because

Table 2-2 Production choices for Billie's Bedroom Shop Choice Quantity of Pillows Produced Quantity of Blankets Produced B 36 0 C 27 7 18 14 E \rho 21 -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 5 pillows and 21 blankets would appear

Figure 2-12 Figure 2-12 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-12.What is the opportunity cost of producing one gallon of milk in Bora Bora?

The production possibilities frontier model assumes which of the following?

Suppose that in Belize,the opportunity cost of producing a sailboat is 5 hang gliders.In Honduras,the opportunity cost of producing a sailboat is 8 hang gliders. A)What is the opportunity cost of producing a hang glider for Belize? B)What is the opportunity cost of producing a hang glider for Honduras? C)Which country has a comparative advantage in the production of hang gliders? D)Which country has a comparative advantage in the production of sailboats?

Table 2-11 One Digital Camera Wheat (per pound) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2-11 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 2-11.What is South Korea's opportunity cost of producing one digital camera?

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

Table 2-11 One Digital Camera Wheat (per pound) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2-11 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 2-11.If the two countries specialize and trade,who should export digital cameras?

Crude oil is not an example of a factor of production,but when crude oil is processed into gasoline,it is a factor of production.

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.Which country has a comparative advantage in the production of popsicles?

If the best surgeon in town is also the best at cleaning swimming pools,then according to the theory of comparative advantage,this person should

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

The natural resources used in production are made available in the

Table 2-7 Possible Output Combinations Shrimp (thousands of pounds) Oysters (thousands of pounds) A 35 0 B 30 20 C 25 35 D 20 47 E 15 57 F 10 64 G 5 68 H 0 70 -Refer to Table 2-7.The Shellfish Shack produces only shrimp and oysters.The table above shows the maximum possible output combinations of the two types of shellfish using all resources and currently available technology. a.Suppose The Shellfish Shack is currently producing at point E.What is the opportunity cost of producing an additional 11,000 pounds of oysters? b.Suppose The Shellfish Shack is currently producing at point E.What happens to the opportunity cost of producing more and more shrimp? Does it increase,decrease,or remain constant? Explain your answer. c.Suppose The Shellfish Shack is currently producing at point B.What happens to the opportunity cost of producing more and more oysters? Does it increase,decrease,or remain constant? Explain your answer. d.Suppose The Shellfish Shack is plagued by a disease which destroys oyster beds but not shrimp habitats.What would happen to its PPF?

Table 2-12 One Canoe One Sailboat Guatemala 10 hours 60 hours Honduras 15 hours 75 hours Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12.What is Honduras's opportunity cost of producing one sailboat?

Figure 2-11 Figure 2-11 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-11.What is the opportunity cost of producing 1 pound of cashews in Indonesia?

Published in 1776,________ was written by Adam Smith.