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

Figure 2-9 -Refer to Figure 2-9.One segment of the circular flow diagram in the figure shows the flow of goods and services from market C to economic agents A.What is market C and who are economic agents A?

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

Suppose your expenses for this term are as follows: tuition: $12,000,room and board: $6,500,books and other educational supplies: $1,500.Further,during the term,you can only work part-time and earn $3,500 instead of your full-time salary of $14,000.What is the opportunity cost of going to college this term,assuming that your room and board expenses would be the same even if you did not go to college?

If society decides it wants more of one good and all resources are fully utilized,then

If a nation changes its laws to more actively enforce intellectual property rights,all of the following will most likely take place except

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 2-7 Figure 2-7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-7.Which country has a comparative advantage in the production of cotton?

In a report made to the U.S.Congress in 2001,the National Academy of Sciences cautioned that if fuel economy encourages the production of smaller and lighter cars,"Some additional traffic fatalities would be expected." This statement suggests that

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. -Refer to Figure 2-2.What is the opportunity cost of one pound of vegetables?

Figure 2-3 -Refer to Figure 2-3.Sergio 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 2-3 represent his production possibilities frontier?

Which of the following are separate flows in the circular flow model?

You have an absolute advantage whenever you

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

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

All of the following are examples of spending on factors of production in the circular flow model except

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 X to Y

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

Figure 2-7 Figure 2-7 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-7.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of cotton?

Table 2-4 Table 2-4 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-4.If the two countries specialize and trade,who should export wheat?

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.