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

Table 2-4 Production Choices for Dina's Diner -If society decides it wants more of one good and ________, then it has to give up some of another good and incur some opportunity costs.

On a diagram of a production possibility frontier, opportunity cost is represented by the slope of the production possibility frontier.

How are efficiency and inefficiency represented on a production possibilities frontier?

If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the

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. If the two countries specialize and trade, who should export canoes?

If a country is producing efficiently and is on the production possibilities frontier, producing more of one good would result in a movement along the frontier.

What is a circular flow diagram and what does it demonstrate?

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

It is possible to have a comparative advantage in producing a good or service without having an absolute advantage.

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. Honduras has a comparative advantage in the production of

Table 2-4 Production Choices for Dina's Diner -An outward shift of a nation's production possibilities frontier can occur due to

Figure 2-19 -Refer to Figure 2-19. Which two arrows in the diagram depict the following transaction: Dorian Gray hires "Wild Oscar," a professional portrait artist, to paint his picture.

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 both plastic production and food 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. -Refer to Table 2-16. If the two countries specialize and trade, who should export lumber?

What is comparative advantage? What is absolute advantage?

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 one dozen roses?

If a brewery wants to raise funds to purchase a new fermenting vat, it does so in the

Figure 2-1 -Refer to Figure 2-1. Point C is

Figure 2-6 -Refer to Figure 2-6. If the economy is currently producing at point A, what is the opportunity cost of moving to point B?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -If society decides it wants more of one good and all resources are fully utilized, then