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

The slope of a production possibilities frontier measures the ________ of producing one more unit of a good.

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 40 dozen orchids,how many roses can it produce to maximize production?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ could occur because of an influx of immigrant labor.

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

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?

If additional units of a good are produced at an increasing opportunity cost,the production possibility frontier would be bowed outward (concave).

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?

a.Draw a production possibilities frontier for a country that produces two goods,wine and cheese.Assume that resources are not equally suited to both tasks. b.Define opportunity costs. c.Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.

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 Greenland?

Comparative advantage means

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ is the result of advancements in plastic production technology.

For each pound of salami that Hungary produces,it gives up the opportunity to make 10 bottles of beer.Slovakia can produce 1 pound of salami for every 8 bottles of beer it produces.Which of the following is true about the comparative advantage between the two countries?

Adam Smith's ________ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.

Table 2-5 Table 2-5 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 2-5.If the two countries specialize and trade,who should export cell phones?

Table 2-8 Table 2-8 shows the output per month of two people,Wilma and Betty.They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-8.Which of the following statements is true?

Which of the following is a factor of production?

Table 2-5 Table 2-5 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 2-5.Finland has a comparative advantage in the production of

All of the following are considered intellectual property except

The resource income earned by those who supply labor services is called

A critical function of the government in facilitating the operation of a market economy is