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

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 ?

The payment received by suppliers of entrepreneurial skills is called profit.

Figure 2-11 -Refer to Figure 2-11.Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company,to paint her home.

Figure 2-1 -Refer to Figure 2-1.________ is (are)inefficient in that not all resources are being used.

Figure 2-7 Figure 2-7 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-7.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of both pineapples and coconuts?

The production possibilities frontier model assumes all of the following except

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point Y,what is the opportunity cost of moving to point X?

Increasing marginal opportunity cost implies that

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.Estonia has a comparative advantage in the production of

It is not possible to have a comparative advantage in producing a good or service without having an absolute advantage.

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 cultivating a garden?

Which of the following statements is true about a simple circular flow model?

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.Finland has a comparative advantage in the production of

To increase gas mileage,automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage.These facts suggest that a positive relationship exists between safety and gas mileage.

In the desire to have a celebrity's image protected to prevent it from being used in ways he would not approve,a celebrity's estate

Which of the following countries does not come close to the free market benchmark?

The recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by

The unattainable points in a production possibilities diagram are

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point X,what is the opportunity cost of moving to point W?

Figure 2-9 -Refer to Figure 2-9.In the circular flow diagram,who are economic agents A and who are economic agents B?