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

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

Figure 2-3 Figure 2-3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2-3.A movement from ________ could occur because of an influx of immigrant labour.

Table 2-8 Table 2-8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-8.What is Ireland's opportunity cost of producing one guitar?

An increase in the labour force shifts the production possibility frontier inwards over time.

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

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 unicycle?

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.If the two countries specialise and trade,who should export digital cameras?

Scarcity

Any output combination along a production possibility frontier is associated with fully utilised resources.

The Great Depression of the 1930s,with a large number of workers and factories unemployed,would be represented in a production possibility frontier graph by

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.an increase in the patent protection period to 30 years b.an increase of a nation's capital stock c.an improved property rights system Which of the events listed above could cause a movement from V to W?

If a country is producing efficiently and is on the production possibility frontier,the country can produce more of one good without producing less of the other good.

Suppose your expenses for this term are as follows: tuition: $10 000; room and board: $6000; books and other educational supplies: $1000.Further,during the term,you can only work part-time and earn $8000 instead of your full-time salary of $20 000.What is the opportunity cost of going to university this term,assuming that your room and board expenses would be the same even if you did not go to university?

For a person to have a comparative advantage in producing a product,she must be able to produce that product at a lower opportunity cost than her competitors.

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.What is South Korea's opportunity cost of producing one kilo of wheat?

What is the difference between product markets and factor markets?

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

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 36 pizzas and 30 calzones would appear

Figure 2-2 -Refer to Figure 2-2.Steve Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle,and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-2 represents his production possibility frontier?

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew is a factor of production.