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

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

A guild is

If a country produces only two goods,then it is not possible to have a comparative advantage in the production of both those goods.

If the price of a good or service rises,households have to choose whether to buy less of that good or service or spend less on other goods and services.Studies have shown that when the price of health care rises,

Table 2-4 Table 2-4 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 2-4.What is Estonia's opportunity cost of producing one board foot of lumber?

Any output combination inside a production possibility frontier is associated with unused or underutilized resources.

Table 2-3 Table 2-3 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 2-3.Which of the following statements is true?

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

Table 2-4 Table 2-4 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 2-4.What is Estonia's opportunity cost of producing one cell phone?

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia,a nation that produces two goods,roses and orchids. -Refer to Figure 2-2.What is the opportunity cost of one dozen orchids?

An outward shift of a nation's production possibilities frontier can occur due to

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

Figure 2-6 General Motors recently approved for production the Cadillac Converj,an electric car based on its Chevy Volt.The Converj will feature a "Generation 1.5 Voltec" powertrain,with a hybrid engine that runs on a combination of electricity and gasoline.Suppose GM chooses to produce both a coupe version and an SUV version of this hybrid-engine vehicle for its Cadillac brand.Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-6.Suppose worker productivity increases so that the total number of vehicles produced increases as the company adds more machinery,workers and changes the layout of the factory.This is best represented by the

If you can produce more of something than others with the same resources,you have

The opportunity cost of taking an on-line history class is

Table 2-3 Table 2-3 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 2-3.What is George's opportunity cost of mowing a lawn?

Figure 2-1 -Refer to Figure 2-1.________ is (are)unattainable with current resources.

If society decides it wants more of one good and ________,then it has to give up some of another good and incur some opportunity costs.

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 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia,a nation that produces two goods,roses and orchids. -Refer to Figure 2-2.Suppose Vidalia is currently producing 20 dozen orchids per period.How many roses is it also producing,assuming that resources are fully utilized?