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

Figure 2-1 -Refer to Figure 2-1.________ is (are)technically efficient.

The production possibilities frontier shows

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point Y,what is the gain in production if the economy moves to point X?

Suppose there is some unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

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 coconuts in Guatemala?

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.Which of the following statements is true?

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 cell phones?

________ a nation's production possibilities frontier represents economic growth.

Households

A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced.

Increasing opportunity cost along a bowed-out production possibilities frontier occurs because

Which of the following is a factor of production?

Figure 2-13 -Refer to Figure 2-13.Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company,to paint her home.

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.Which of the following statements is true?

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 decrease in the unemployment rate B.general technological advancement C.an increase in consumer wealth Which of the events listed above could cause a movement from V to X?

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.Which of the following statements is true?

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

Identify whether each of the following transactions will take place in the factor market or in the product market: a.Shondra buys a Harley-Davidson Softail motorcycle. b.Aimee works 20 hours a week at a grocery store. c.Gustavo sells a warehouse to a produce delivery company. d.Ocean Spray increases employment at its Middleboro,Massachusetts plant.

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-9.Japan has a comparative advantage in the production of

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 board foot of lumber?