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

If a country is producing efficiently and is on the production possibility frontier,the only way to produce more of one good is to produce less of the other.

You have an absolute advantage whenever you

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

Table 2-6 Table 2-6 shows the number of labour hours required to produce a digital camera and a kilogram of wheat in China and South Korea. -Refer to Table 2-6.Does either China or South Korea have an absolute advantage and,if so,in what product?

Table 2-3 Production Choices for Dina's Cafe -Refer to Table 2-3.Assume Dina's Cafe only produces sliders and hot wings.A combination of 80 sliders and 100 hot wings would appear

Table 2-4 Table 2-4 shows the output per week of two jewellers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2-4.Which of the following statements is true?

When you purchase a new set of spurs you do so in the

Table 2-5 Table 2-5 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 2-5.What is Barney's opportunity cost of making a pogo stick?

Figure 2-6 Figure 2-6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2-6.What is the opportunity cost of 80 dozen orchids?

The opportunity cost of going to an outdoor music festival is

Table 2-7 Table 2-7 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 2-7.What is Horace's opportunity cost of bathing a cat?

Figure 2-3 Figure 2-3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2-3.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 a secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

If Sanjaya can shuck more oysters in one hour than Tatiana,then Sanjaya has a comparative advantage in shucking oysters.

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.

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

What shape does a production possibility frontier take if it displays increasing opportunity costs? What shape does a production possibility frontier take if it displays constant opportunity costs? Which shape is most common in production situations?

Jane can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 pies,what is the opportunity cost of baking an additional 15 cakes?

An Inquiry into the Nature and Causes of the Wealth of Nations,published in 1776,was written by

The points outside the production possibility frontier are

Figure 2-3 Figure 2-3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2-3.Consider the following events: a.a decrease in the unemployment rate b.an increase in a nation's money supply c.an influx of immigrant workers Which of the events listed above could cause a movement from X to Z?