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

Published in 1776,________ was written by Adam Smith.

In a production possibilities frontier,a point inside the frontier is

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.What is Estonia's opportunity cost of producing one cell phone?

For each pound of salami that Hungary produces,it gives up the opportunity to make 10 bottles of beer.Slovakia gives up the opportunity to produce of 1 pound of salami for every 8 bottles of beer it produces.Which of the following is true about the comparative advantage between the two countries?

Adam Smith's ________ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.

Table 2-6 Table 2-6 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 2-6.What is Lucy's opportunity cost of making a tricycle?

Economic growth is represented on a production possibilities frontier model by the production possibilities frontier

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ could occur because of additional government restrictions toward allowing immigrant labor.

Table 2-6 Table 2-6 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 2-6.Which of the following statements is true?

Table 2-7 Table 2-7 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 2-7.Which of the following statements is true?

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

List the four broad categories of factors of production.

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

If a vineyard wants to raise funds to purchase a new bottling machine,it does so in the

Figure 2-7 Tesla opened its Gigafactory near Sparks,Nevada to produce lithium-ion batteries for both its automobiles and its Powerwall energy storage products.Figure 2-7 shows changes to its production possibilities frontier at the Gigafactory in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Assume that in response to changing consumer demands,Tesla cuts back on the production automobile batteries and increases its production of Powerwall batteries.This strategy is best represented by the

When Feeding America changed its food allocation system to one that resembled a market,each food program was given a number of "shares" that they could use in bidding against other food programs for the types of food that best met the needs of the people using their programs.This is an example of how the market leads firms to provide consumers with the goods they want,which Adam Smith described by using the metaphor

Table 2-7 Table 2-7 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 2-7.What is Mickey's opportunity cost of making an umbrella?

A critical function of the government in facilitating the operation of a market economy is

Table 2-8 Table 2-8 shows the output per month of two people,Wilma and Betty.They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-8.What is Wilma's opportunity cost of making a bench?

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is George's opportunity cost of mowing a lawn?