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

Figure 2-19 -All of the following countries come close to the free market benchmark except

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

Figure 2-11 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 2-11 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions at this factory. -Refer to Figure 2-11. Suppose Mercedes-Benz has to shut down a portion of its facility as it works on remodeling the facility to merge two of its separate assembly lines in preparation for the production of a new, hybrid models. The production decision to shut down temporarily will result in a

Figure 2-16 -Refer to Figure 2-16. In the circular flow diagram, economic agents M represent

Table 2-20 Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20. Does either Japan or Thailand have an absolute advantage and if so, in what product?

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.

In economics, the term "free market" refers to a market where products are traded but not sold.

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 reduction in the patent protection period to no more than 2 years B. a war that destroys a substantial portion of a nation's capital stock C. the lack of secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

Figure 2-11 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 2-11 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions at this factory. -Refer to Figure 2-11. 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

Because the copyright on the L. Frank Baum book The Wonderful Wizard of Oz expired many years ago, the actual written words from the book are in the public domain. Publishers who now choose to sell their own versions of the book

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. -Refer to Figure 2-2. If Mendonca chooses to produce 160 pounds of vegetables, how much meat can it produce to maximize production?

Figure 2-8 Figure 2-8 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-8. What is the opportunity cost of 100 dozen roses?

How does Adam Smith's idea of the "invisible hand" apply to the various parts, made by many different manufacturers in many different countries, that are used by Apple to produce an iPad?

What is an entrepreneur?

An example of a factor of production is

Figure 2-17 -Refer to Figure 2-17. In the circular flow diagram, who are economic agents A and who are economic agents B?

Which of the following is not a factor of production?

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

Table 2-14 Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14. What is Scotland's opportunity cost of producing one motorcycle?

a. Draw a production possibilities frontier for a country that produces two goods, beer and pretzels. Assume that resources are equally suited to both tasks. b. Define opportunity costs. c. Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.