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

Izzy Amador is a highly talented tattoo artist.She has chosen to specialize in tattoo art because of all of the following except

To increase gas mileage,automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage.These facts suggest that a positive relationship exists between safety and gas mileage.

Figure 2-8 Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-8.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of both pineapples and coconuts?

Define the term "property rights." Explain why the lack of well-defined and enforceable property rights is detrimental to the smooth functioning of a market system.

Which of the following countries does not come close to the free market benchmark?

Figure 2-13 -Refer to Figure 2-13.Which two arrows in the diagram depict the following transaction: Stanley purchases the novel,"Night of Sorrows" for his summer reading pleasure.

The resource income earned by those who supply labor services is called

Table 2-5 Table 2-5 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-5.If the two countries specialize and trade,who should export lumber?

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?

Suppose that in the United States,the opportunity cost of producing a motor engine is 4 auto bodies.In Canada,the opportunity cost of producing a motor engine is 2 auto bodies. a.What is the opportunity cost of producing an auto body for the United States? b.What is the opportunity cost of producing an auto body for Canada? c.Which country has a comparative advantage in the production of auto bodies? d.Which country has a comparative advantage in the production of motor engines?

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-9.Which country has a comparative advantage in the production of snow cones?

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

Why are music,television,and movie companies concerned about their products being posted to Internet Web sites such as YouTube?

The circular flow model demonstrates

Table 2-5 Table 2-5 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-5.Finland has a comparative advantage in the production of

Figure 2-8 Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-8.What is the opportunity cost of producing 1 ton of pineapples in Guatemala?

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 50 sliders and 50 hot wings would appear

An example of a factor of production is

________ behavioral assumption about humans was that people usually act in a rational,self-interested way.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?