Exam 2: Choices and Trade-Offs in the Market

In a two-good,two-country world,if one country has an absolute advantage in the production of both goods,it must also have a comparative advantage in the production of both goods.

An increase in the labour force shifts the production possibility frontier inwards over time.

Table 2.8 One Motorcycle One Guitar Ireland 20 hours 4 hours Scotland 8 hours 2 hours Table 2.8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2.8.If the two countries specialise and trade,who should export guitars?

Table 2.4 Serena Haley Bracelets 8 9 Necklaces 16 12 Table 2.4 shows the output per week of two jewellers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4.Which of the following statements is true?

Table 2.3 Production Choices for Dina's Cafe Choice Quantity of Sliders Produced Quantity of Hot Wings Produced A 160 0 B 120 50 C 80 100 D 40 150 E 0 200 -Refer to Table 2.3.Assume Dina's Cafe only produces sliders and hot wings.A combination of 120 sliders and 100 hot wings would appear________.

Table 2.1 Production choices for Tomaso's Trattoria Choice Quantity of Pizzas Produced Quantity of Calzones Produced A 48 0 B 36 15 C 24 30 D 12 45 E 0 60 -Refer to Table 2.1.Assume Tomaso's Trattoria only produces pizzas and calzones.Where would a combination of 36 pizzas and 30 calzones appear?

Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

Figure 2.1 -Refer to Figure 2.1.Point B is __________.

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.What is South Korea's opportunity cost of producing one digital camera?

If a commercial dairy farm wants to raise funds to purchase feeding troughs,it does so in the________.

In economics,the term 'free market' refers to a market where products are traded but not sold.

If a nation changes its laws to more actively enforce intellectual property rights,all of the following will most likely take place except:

The ability of an economy to increase the production of goods and services is __________.

Scarcity________.

Table 2.5 Fred Barney Pogo Sticks 24 28 Unicycles 8 14 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5.What is Fred's opportunity cost of making a pogo stick?

Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2.3.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 Which of the events listed above could cause a movement from Y to W?

Figure 2.4 -Refer to Figure 2.4.If the economy is currently producing at point Y,the opportunity cost of moving to point W is __________.

Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 kilogram of cashews in Indonesia?

Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7.What is the opportunity cost of producing 1 kilogram of cashews in Pakistan?