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

Table 2-16 Table 2-16 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 2-16. Estonia has a comparative advantage in the production of

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 15 calzones would appear

Which of the following is a factor of production?

Table 2-16 Table 2-16 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Izzy Amador is a highly talented tattoo artist. She has chosen to specialize in tattoo art because of all of the following except

If property rights are not well enforced, all of the following are likely to occur except

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. If Vidalia chooses to produce 60 dozen orchids, how many roses can it produce to maximize production?

Figure 2-5 -Refer to Figure 2-5. If the economy is currently producing at point X, what is the opportunity cost of moving to point Y?

Figure 2-18 -Refer to Figure 2-18. 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?

Figure 2-5 -Refer to Figure 2-5. If the economy is currently producing at point W, what is the opportunity cost of moving to point X?

Consider a country that produces only two goods: parrots and iguanas. Suppose it is impossible for this country to increase its production of parrots without producing fewer iguanas. In this case, its current output combination is efficient.

What is a production possibilities frontier? What do points along the frontier represent? What do points inside and outside the frontier represent?

Suppose your expenses for this term are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

Article Summary Since 2008, the United States has been involved in trade negotiations over the Trans-Pacific Partnership (TPP), a free trade agreement with 11 other countries on both sides of the Pacific Ocean. One area of the negotiations involves patents and intellectual property rights in the pharmaceutical industry. A number of developing countries have ignored international agreements concerning patents and intellectual property rights as a way to benefit their domestic pharmaceutical industries, to the detriment of those companies which have spent considerable time and money developing new medicines. For every 5,000 to 10,000 experimental drugs contemplated, only one will typically gain FDA approval, and this occurs only after up to 15 years of research at an average cost of more than $1 billion. Also, 30 percent of the U.S. workforce is either directly or indirectly employed in the pharmaceutical industry, so protection of these intellectual property rights is very important for the U.S. economy. Source: Doug Schoen, "Intellectual Property Rights Matter," Forbes, September 24, 2013. -Refer to the Article Summary. If more developing countries began abiding by international agreements which protect intellectual property rights, all of the following would most likely occur except

All of the following are examples of spending on factors of production in the circular flow model except

Figure 2-1 -Refer to Figure 2-1. ________ is (are) inefficient in that not all resources are being used.

Table 2-4 Production Choices for Dina's Diner -Which of the following would shift a nation's production possibilities frontier inward?

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

A major factor contributing to the slow growth rate of less developed economies is

Figure 2-14 Figure 2-14 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. -Refer to Figure 2-14. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

Table 2-16 Table 2-16 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 2-16. If the two countries specialize and trade, who should export cell phones?