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

A production possibilities frontier with a bowed outward shape indicates

Table 2.12 Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland. -Refer to Table 2.12.What is Estonia's opportunity cost of producing one cell phone?

In economics, the term "free market" refers to a market where no sales tax is imposed on products sold.

________ shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

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 only way to produce more of one good is with an advance in technology.

For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese.France can produce 1 bottle of wine for every 25 pounds of cheese it produces.Which of the following is true about the comparative advantage between the two countries?

Figure 2.5 Alt text for Figure 2.5: In figure 2.5, a graph compares paper and steel production. Long description for Figure 2.5: The x-axis is labelled, steel in millions of tons and the quantities 14, 16, 19, and 20 are marked.The y-axis is labelled, paper in millions of tons, and the quantities 4, 9, and 11 are marked.Points Y(14, 9), W(16, 9), (19, 4), and an unnamed point (14, 11)are plotted on the graph, and joined to the respective axes using dotted lines.A concave curve is drawn from the y-axis to the x-axis, passing through the unnamed point (14, 11), and points W(16, 9), and X(19, 4).Point Y is between the curve and the axes. -Refer to Figure 2.5.If the economy is currently producing at point Y, what is the opportunity cost of moving to point W?

Figure 2.22 Alt text for Figure 2.22: In figure 2.22, a circular flow diagram. Long description for Figure 2.22: 4 circles arranged in a circle, labelled as follows, clockwise from the top center: Households, Factor Markets, Firms, and Product Markets.All these circles are connected by arrows J, G K and M, as follows: Arrow M: Households to Factor Markets Arrow J: Factor Markets to Households Arrow M: Factor Markets to Firms Arrow J: Firms to Factor Markets Arrow K: Firms to Product Markets Arrow G: Product Markets to Firms Arrow K: Product Markets to Households Arrow G: Households to Product Markets -Refer to Figure 2.22.Which two arrows in the diagram depict the following transaction? Stanley purchases the novel Night of Sorrows for his summer reading pleasure.

Figure 2.20 Alt text for Figure 2.20: In figure 2.20, a circular flow diagram. Long description for Figure 2.20: 4 circles arranged in a circle, labelled as follows, clockwise from the top center: Economic Agents A, an unmarked circle, Economic Agents B and Market C.The flow of goods and services goes from Market C to Economic Agents A.The flow of spending on goods and services goes from Market C to Economic Agents B. -Refer to Figure 2.20.In the circular flow diagram, who are Economic Agents A and who are Economic Agents B?

The primary purpose of patents and copyrights is to

If the best surgeon in town is also the best at cleaning swimming pools, then according to economic reasoning, this person should

What is the opportunity cost of a provincial government raising taxes to pay for increased spending on health care?

Households ________ final goods and services in the ________ market.

Figure 2.10 Figure 2.10 shows various points on three different production possibilities frontiers for a nation. Alt text for Figure 2.10: In figure 2.10, a graph comparing 3 different production possibilities frontiers for a nation. Long description for Figure 2.10: The x-axis is labelled, plastic products, and the y-axis is labelled, food products.3 convex curves are shown, with points V, W, X, Y, and Z plotted.The first curve begins just past the half-way point on the y-axis, and ends just past the half-way point on the x-axis.Points W and X are plotted along the curve, with point W approximately 1 third of the way from the start of the curve, and point X more than 2 thirds of the way along the curve.The second curve begins almost 3 quarters of the way up the y-axis and ends just past the termination of the first curve on the x-axis.Point Y is plotted on the second curve, approximately 2 thirds of the way along the curve.The third curve begins at the same point as the second curve, and ends approximately 3 quarters of the way along the x-axis.Point Z is plotted on the third curve, a little less than half-way along the curve.Point V is plotted between the first curve and the origin. -Refer to Figure 2.10.A movement from ________ is the result of advancements in plastic production technology.

In the circular flow model, producers

The natural resources used in production are made available in the

Figure 2.10 Figure 2.10 shows various points on three different production possibilities frontiers for a nation. Alt text for Figure 2.10: In figure 2.10, a graph comparing 3 different production possibilities frontiers for a nation. Long description for Figure 2.10: The x-axis is labelled, plastic products, and the y-axis is labelled, food products.3 convex curves are shown, with points V, W, X, Y, and Z plotted.The first curve begins just past the half-way point on the y-axis, and ends just past the half-way point on the x-axis.Points W and X are plotted along the curve, with point W approximately 1 third of the way from the start of the curve, and point X more than 2 thirds of the way along the curve.The second curve begins almost 3 quarters of the way up the y-axis and ends just past the termination of the first curve on the x-axis.Point Y is plotted on the second curve, approximately 2 thirds of the way along the curve.The third curve begins at the same point as the second curve, and ends approximately 3 quarters of the way along the x-axis.Point Z is plotted on the third curve, a little less than half-way along the curve.Point V is plotted between the first curve and the origin. -Consider the following events: a.an increase in the unemployment rate b.a decrease in a nation's money supply c.a war that kills a significant portion of a nation's population Refer to Figure 2.10.Which of the events listed above could cause a movement from Z to X ?

Table 2.12 Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland. -Refer to Table 2.12.If the two countries specialize and trade, who should export lumber?

Stricter laws and regulations to protect intellectual property rights