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

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 reduction in the patent protection period to no more than 2 years B.a war that destroys a substantial portion of a nation's capital stock C.the lack of secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

Table 2-17 James Lucy Wagons 16 18 Tricycles 32 24 Table 2-17 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles. -Refer to Table 2-17.What is James's opportunity cost of making a wagon?

Any output combination along a production possibility frontier is associated with overused or unattainable resources.

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days.This statement suggests that

Comparative advantage means the ability to produce a good or service

For each surfboard that Australia produces,it gives up the opportunity to make 25 boomerangs.New Zealand can produce 1 surfboard for every 15 boomerangs it produces.Which of the following is true about the comparative advantage between the two countries?

An example of a factor of production for Dell is

If Blake can pick more cherries in one hour than Cody,then Blake has a comparative advantage in cherry picking.

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 a hat?

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties.If he now produces 35 bow ties and 15 neckties,what is the opportunity cost of producing an additional 15 neckties?

An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier.

Figure 2-18 -Refer to Figure 2-18.Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

If opportunity costs are ________,the production possibilities frontier would be graphed as a negatively sloped straight line.

Firms

In economics,the term "free market" refers to a market where products are traded but not sold.

If a country is producing efficiently and is on the production possibilities frontier,the only way to produce more of one good is with an advance in technology.

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 China's opportunity cost of producing one digital camera?

Table 2-17 James Lucy Wagons 16 18 Tricycles 32 24 Table 2-17 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles. -Refer to Table 2-17.What is Lucy's opportunity cost of making a wagon?

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.Guatemala has a comparative advantage in the production of

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 movements: A.from point V to point W B.from point W to point Y C.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?