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

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.If Vidalia chooses to produce 50 dozen roses,how many orchids can it produce to maximize production?

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?

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

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

Consider a country that produces only two goods: bird feeders and binoculars.Suppose it is possible for this country to increase its production of bird feeders without producing fewer binoculars.In this case,its current output combination is inefficient.

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-9.If the two countries specialize and trade,who should export wristwatches?

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-9.If the two countries specialize and trade,who should export rice?

Should countries specialize in producing goods and services based on having a comparative advantage or an absolute advantage? Why?

In a two-good,two country world,if one country has a comparative advantage in the production of one good,it can benefit by trading with other countries.

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?

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

________ behavioral assumption about humans was that people usually act in a rational,self-interested way.

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 snow cone in Iceland?

Any output combination along a production possibility frontier is associated with overused or unattainable resources.

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

To compete in the automobile market,Tesla must make many strategic decisions such as whether to introduce a new car model,how to sell and service its cars,and where to advertise.At Tesla's Fremont,California plant,managers must decide on the monthly production quantities of their S and X models.In making this decision,the managers

Figure 2-8 Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-8.What is the opportunity cost of producing 1 ton of coconuts in Costa Rica?

Figure 2-7 Mercedes Benz produces a full line of luxury automobiles,including coupes,sedans,and SUVs,at a variety of manufacturing plants across the globe.Assume Mercedes Benz produces both coupes and SUVs at its Tuscaloosa,Alabama factory.Figure 2-7 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions at this factory. -Refer to Figure 2-7.In response to changing consumer demands,Mercedes-Benz cuts back on the production of SUVs and increases its production of coupes.This strategy is best represented by

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-9.What is Japan's opportunity cost of producing one pound of rice?

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days.This statement suggests that