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

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.In response to changing consumer demands,Cadillac cuts back on the production of SUVs and increases its production of coupes.This strategy is best represented by

For each watch that Switzerland produces,it gives up the opportunity to make 50 pounds of chocolate.Germany can produce 1 watch for every 100 pounds of chocolate it produces.Which of the following is true about the comparative advantage between the two countries?

The ability to exercise control over one's own resources within the confines of the law refers to

If Blake can pick more cherries in one hour than Cody,then Blake has a comparative advantage in cherry picking.

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.What is the opportunity cost of producing 1 ton of pineapples in Guatemala?

On a diagram of a production possibility frontier,opportunity cost is represented by the slope of the production possibility frontier

Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures.If she now performs 35 manicures and 70 pedicures,what is the opportunity cost of performing an additional 15 manicures?

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 50 hot wings would appear

If a country is producing efficiently and is on the production possibilities frontier,the only way to produce more of one good is with an advance in technology.

Define the term "property rights." Explain why the lack of well defined and enforceable property rights is detrimental to the smooth functioning of a market system.

In 18th century Europe,governments gave guilds legal authority to limit production of goods.This authority obstructed the market mechanism because the guild's actions prevented the forces of ________ from coordinating the self-interested decisions of producers and consumers.

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.What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

All of the following are considered intellectual property except

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.What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?

The principle of ________ is that the economic cost of using a factor of production is the alternative use of that factor that is given up.

The basis for trade is absolute advantage,not comparative advantage.

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 25 hot wings would appear

Figure 2-10 -Refer to Figure 2-10.One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G.The funds represent spending on goods and services.What is market F and who are economic agents G?

Suppose in the United States,the opportunity cost of producing a motor engine is 4 auto bodies.In Canada,the opportunity cost of producing a motor engine is 2 auto bodies. a.What is the opportunity cost of producing an auto body for the United States? b.What is the opportunity cost of producing an auto body for Canada? c.Which country has a comparative advantage in the production of auto bodies? d.Which country has a comparative advantage in the production of motor engines?

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.Which country has a comparative advantage in the production of pineapples?