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

Figure 2-6 -Refer to Figure 2-6.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

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.Honduras has a comparative advantage in the production of

Without technological advancement,how can a nation achieve economic growth?

Consider the following items: A.the novel "A Gentleman in Moscow" by Amor Towles B.the "The Spirited Shipper," an innovative wine shipping box C.a Swiss chef's award-winning recipe D.an original fabric design,for example,the fabric used for "Coach" bags and luggage Which of the items listed is an example of intellectual property?

Table 2-21 Digital Camera Wheat (bushel) China 100 hours 5 hours South Korea 90 hours 3 hours -Refer to Table 2-21.This table shows the number of labor hours required to produce a digital camera and a bushel of wheat in China and South Korea. a.Assume each country has a total of 9,000 labor hours to devote to the production of the two goods and draw the production possibilities frontier for each country.Put "Digital Camera" on the horizontal axis and "Wheat" on the vertical axis.Be sure to identify the intercept values on your graphs. b.Suppose each country allocates 60% of its labor hours to wheat production and 40% to the production of digital cameras.Complete Table 2-22 below to show each country's output of the two products. Table 2-22: Production and Consumption with no Trade Digital Camera Wheat Output Output (bushels) China South Korea 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 China's consumption point "C" and South Korea's consumption point "K." d.Suppose the two countries specialize and trade.Which country should produce digital cameras and which should produce wheat? Explain your answer. e.Complete Table 2-23 below to show each country's output with specialization. Table 2-23: Output with Specialization Digital Camera Wheat Output Output (bushels) China South Korea Total f.Did specialization increase the combined output for the two countries without any increase in resources? If so,by how much? g.Suppose China and South Korea agree to trade so that in exchange for 1,200 bushels of wheat,the exporter of wheat receives 48 digital cameras.Complete Table 2-24 below to show each country's consumption bundle after trade. Table 2-24: Consumption with Trade Digital Camera Wheat Output Output (bushels) China South Korea h.Show the consumption points after trade on each country's production possibilities frontier.Label these points "B" for China and "J" for South Korea. i.Has trade made the two countries better off? Explain your answer.

Without an increase in the supply of the factors of production,how can a nation achieve economic growth?

Suppose your expenses for this term are as follows: tuition: $9,000,room and board: $1,500,books and other educational supplies: $1,000.Further,during the term,you can only work part-time and earn $3,000 instead of your full-time salary of $8,000.What is the opportunity cost of going to college this term,assuming that your room and board expenses would be the same even if you did not go to college?

An inward shift of a nation's production possibilities frontier can occur due to

The payment received by suppliers of entrepreneurial skills is called rent.

If a country produces only two goods,it is possible to have a comparative advantage in the production of both those goods.

The slope of a production possibilities frontier

A decrease in population shifts the production possibilities frontier outwards over time.

You have an absolute advantage whenever you

The resource income earned by those who supply ________ is called wages.

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

Which of the following would shift a nation's production possibilities frontier outward?

Table 2-1 Production choices for Tomaso's Trattoria Choice Quantity of Pizzas Produced Quantity of Calzones Produced A 48 0 B 36 15 C 24 30 D 12 45 E 0 60 -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 36 pizzas and 30 calzones would appear

On a production possibilities frontier,opportunity cost is represented by the slope of the production possibilities frontier.

An outward shift of a nation's production possibilities frontier can occur due to

Figure 2-15 -Refer to Figure 2-15.One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J.What is market K and who are economic agents J?