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

Published in 1776,________ was written by Adam Smith.

Table 2-2 Production choices for Nadia's Neckware -Refer to Table 2-2.Assume Nadia's Neckware only produces ascots and bowties.A combination of 16 ascots and 6 bowties would appear

Individuals who have never been the best at doing anything

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

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

________ a nation's production possibilities frontier represents economic growth.

The unattainable points in a production possibilities diagram are

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

When a celebrity has the desire to have his image protected following his death,this is best described as an example of the protection of

Which of the following would shift a nation's production possibilities frontier inward?

A guild is

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?

An example of a factor of production is

An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier.

Table 2-11 -Refer to Table 2-11.This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. a.Which country has an absolute advantage in the production of cell phones? b.Which country has an absolute advantage in the production of lumber? c.What is Estonia's opportunity cost of producing one cell phone? d.What is Finland's opportunity cost of producing one cell phone? e.What is Estonia's opportunity cost of producing one board foot of lumber? f.What is Finland's opportunity cost of producing one board foot of lumber? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce cell phones? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce lumber?

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 a free market there are virtually no restrictions,or at best few restrictions,on how a good or service can be produced or sold.

Which of the following is not a flow in the circular flow model?

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-9.What is the opportunity cost of producing 1 popsicle in Greenland?

Table 2-2 Production choices for Nadia's Neckware -Refer to Table 2-2.Assume Nadia's Neckties only produces ascots and bowties.Nadia faces ________ opportunity costs in the production of ascots and bowties.