Exam 2: Choices and Trade-Offs in the Market

According to the production possibility model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

If a brewery wants to raise funds to purchase a new fermenting tank,it would do so in what market?

Each person goes about her daily business seeking to maximise her own self interests.In doing so,she contributes to the welfare of society at large.This is the idea underlying Adam Smith's 'invisible hand.'

Suppose your expenses for this term are as follows: tuition: $10 000,room and board: $6 000,books and other educational supplies: $1 000.Further,during the term,you can only work part-time and earn $8 000 instead of your full-time salary of $20 000.What is the opportunity cost of going to university this term,assuming that your room and board expenses would be the same even if you did not go to university?

Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves.If she now produces 60 silk roses and 80 silk leaves,the opportunity cost of producing an additional 10 silk roses is _________.

What is the opportunity cost of taking a semester long economics class?

Table 2.10 Digitcl Curnera Wheat (bushels) China 100 hours 5 hours South Korea 90 hours 3 hours -Refer to Table 2.10.This table shows the number of labour hours required to produce a digital cameras and a bushel of wheat in China and South Korea. a.Which country has an absolute advantage in the production of digital cameras? b.Which country has an absolute advantage in the production of wheat? c.What is China's opportunity cost of producing one digital camera? d.What is South Korea's opportunity cost of producing one digital camera? e.What is China's opportunity cost of producing 1 kilogram of wheat? f.What is South Korea's opportunity cost of producing 1 kilogram of what? g.If each country specialises in the production of the product in which it has a comparative advantage,who should produce digital cameras? h.If each country specialises in the production of the product in which it has a comparative advantage,who should produce wheat? __________________________________________________________________________________________________________________________________________________________________________________________

An example of a factor or production is ___________.

For each surfboard that Australia produces,it gives up the opportunity to make 25 boomerangs.New Zealand can produce one surfboard for every 15 boomerangs it produces.Which of the following is true about the comparative advantage between the two countries?

Figure 2.2 -Refer to Figure 2.2.Steve Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.The graph in Figure 2-2 that represents his production possibility frontier is __________.

Which of the following is not a critical function of the government in facilitating the operation of a market economy?

Table 2.7 Tammi Horace Dogs Groomed 20 12 Cats Bathed 10 8 Table 2.7 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2.7.What is Tammi's opportunity cost of bathing a cat?

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.What is Serena's opportunity cost of making a necklace?

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 China's opportunity cost of producing one digital camera?

If the opportunity cost of producing more of one good remains the same as more of that good is produced,then the production method is inefficient.

What does a production possibility frontier with a bowed outward shape indicate?

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

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not? __________________________________________________________________________________________________________________________________________________________________________________________

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 unicycle?

Which of the following statements about an entrepreneur is false?