Exam 2: Choices and Trade-Offs in the Market

Table 2.6 One Digital Camera Wheat (per kilogram) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2.6 shows the number of labour hours required to produce a digital camera and a kilogram of wheat in China and South Korea. -Refer to Table 2.6.Does either China or South Korea have an absolute advantage and if so,in what product?

Adam Smith's behavioural assumption about humans was that people________.

The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products.

If additional units of a good could be produced at an increasing opportunity cost,the production possibility frontier would be linear.

If Tanisha can audit more tax returns in 1 hour than Libby,then Tanisha has an absolute advantage in auditing tax returns.

On a diagram of a production possibility frontier,opportunity cost is represented by the production possibility frontier shifting outward.

Consider the following items: A.the album '21' by Adele B.a Dutch horticulturalist's new method for cultivating hybrid tulips C.Rolls Royce's 'Spirit of Ecstasy' hood ornament design D.the sale of Tumi luggage at a Macy's department store Which of the items listed is an example of intellectual property?

Table 2.6 One Digital Camera Wheat (per kilogram) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2.6 shows the number of labour hours required to produce a digital camera and a kilogram of wheat in China and South Korea. -Refer to Table 2.6.If the two countries specialise and trade,who should export digital cameras?

If a country is producing efficiently and is on the production possibility frontier,the only way to produce more of one good is to produce less of the other.

Crude oil is not an example of a factor of production,but when crude oil is processed into petrol,it is a factor of production.

Table 2.9 One Matarrycle One Guitur Ireland 10 hours 2.5 hours Scotland 9 hours 2 hours -Refer to Table 2.9.This table shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland. a.Which country has an absolute advantage in the production of motorcycles? b.Which country has an absolute advantage in the production of guitars? c.What is Ireland's opportunity cost of producing one motorcycle? d.What is Scotland's opportunity cost of producing one motorcycle? e.What is Ireland's opportunity cost of producing one guitar? f.What is Scotland's opportunity cost of producing one guitar? g.If each country specialises in the production of the product in which it has a comparative advantage,who should produce motorcycles? h.If each country specialises in the production of the product in which it has a comparative advantage,who should produce guitars? __________________________________________________________________________________________________________________________________________________________________________________________

Specialising in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except _________.