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

Figure 2-8 -Refer to Figure 2-8.One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J.What is market K and who are economic agents J?

Figure 2-11 -Refer to Figure 2-11.Which two arrows in the diagram depict the following transaction: LaDonna sells 20 pairs of sunglasses at the Oakley store.

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

Figure 2-10 -Refer to Figure 2-10.One segment of the circular flow diagram in the figure shows the flow of funds from economic agents E to market F.Who are economic agents E and what is market F?

Table 2-3 Table 2-3 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 2-3.What is Serena's opportunity cost of making a necklace?

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.South Korea has a comparative advantage in the production of

According to the production possibility model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

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.What is China's opportunity cost of producing one pound of wheat?

The U.S.government provides health care to about 30 percent of the population through programs such as Medicare and Medicaid.The Congressional Budget Office estimates that as the U.S.population ages and medical costs continue to rise,federal government spending on Medicare will

In 18th century Europe,governments gave guilds legal authority to limit production of goods.Did this authority obstruct or improve the market mechanism and how?

To increase gas mileage,automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage.These facts suggest that a negative relationship exists between safety and gas mileage.

Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves.If she now produces 60 silk roses and 80 silk leaves,what is the opportunity cost of producing an additional 10 silk roses?

The attainable production points on a production possibility curve are

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.What is China's opportunity cost of producing one digital camera?

Stricter laws and regulations to protect intellectual property rights

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 economic growth?

Figure 2-11 -Refer to Figure 2-11.Which two arrows in the diagram depict the following transaction: Barney earns $250 for selling scissors and razors to Floyd's Barber Shop.

Table 2-2 -Refer to Table 2-2.The Fruit Farm produces only apples and pears.The table above shows the maximum possible output combinations of the two fruits using all resources and currently available technology. a.Graph The Fruit Farm's production possibilities frontier.Put apples on the horizontal axis and pears on the vertical axis.Be sure to identify the output combination points on your diagram. b.Suppose The Fruit Farm is currently producing at point D.What is the opportunity cost of producing an additional 8,000 pounds of pears? c.Suppose The Fruit Farm is currently producing at point D.What happens to the opportunity cost of producing more and more pears? Does it increase,decrease or remain constant? Explain your answer. d.Suppose The Fruit Farm is currently producing at point G.What happens to the opportunity cost of producing more and more apples? Does it increase,decrease or remain constant? Explain your answer. e.Suppose The Fruit Farm is plagued by the apple maggot infestation which destroys apple trees but not pears.Show in a graph what happens to its PPF.

How do firms and households interact in markets?

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