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

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, which means

Figure 2-19 -Refer to Figure 2-19. Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

Table 2-10 Table 2-10 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2-10. What is Fred's opportunity cost of making a pogo stick?

Figure 2-12 Figure 2-12 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-12. What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

On a diagram of a production possibility frontier, economic decline (negative growth) is represented by the production possibility frontier shifting inward.

Table 2-12 Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12. What is Honduras's opportunity cost of producing one sailboat?

Table 2-9 Table 2-9 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2-9. Which of the following statements is true?

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 movements: a. from point V to point W B. from point W to point Y C. from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?

The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products.

The points outside the production possibilities frontier are

Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-13. What is the opportunity cost of producing one gallon of honey in Bora Bora?

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 Y to Z

Which of the following is a flow in the circular flow model?

Table 2-15 Table 2-15 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-15. What is George's opportunity cost of mowing a lawn?

For a person to have a comparative advantage in producing a product, he must be able to produce that product at a higher opportunity cost than his competitors.

The ability to exercise control over one's own resources within the confines of the law refers to

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

Increasing opportunity cost is represented by a ________ production possibilities frontier.

If the production possibilities frontier is linear, then

Table 2-4 Production Choices for Dina's Diner -Without technological advancement, how can a nation achieve economic growth?