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

Households

Table 2-13 Table 2-13 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-13. What is Tammi's opportunity cost of bathing a cat?

What is meant by the term "free market"?

When a celebrity has the desire to have his image protected following his death, this is best described as an example of the protection of

The primary purpose of patents and copyrights is to

Crude oil is not an example of a factor of production, but when crude oil is processed into gasoline, it is a factor of production.

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. Which country has a comparative advantage in the production of coconuts?

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. What is Serena's opportunity cost of making a necklace?

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.

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 Ireland's opportunity cost of producing one motorcycle?

________ behavioral assumption about humans was that people usually act in a rational, self-interested way.

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. -A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier.

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

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

All of the following are examples of spending on goods and services in the circular flow model except

In the circular flow model, households

If Abigail can make more candles in one day than Pierre, then Abigail has an absolute advantage in making candles.

In the circular flow model, households supply resources such as labor services in the factor market.

In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

Figure 2-19 -Refer to Figure 2-19. Which two arrows in the diagram depict the following transaction: Barney earns $250 for selling scissors and razors to Floyd's Barber Shop.