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

Economic decline (negative growth)is represented on a production possibilities frontier model by the production possibility frontier

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

Adam Smith's invisible hand refers to

Increasing opportunity cost is represented by a ________ production possibilities frontier.

Entrepreneurs bring together the factors of production to produce goods and services.

For each bottle of wine that Italy produces,it gives up the opportunity to make 10 pounds of cheese.France can produce 1 bottle of wine for every 25 pounds of cheese it produces.Which of the following is true about the comparative advantage between the two countries?

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point W,what is the opportunity cost of moving to point X?

In a free market there are virtually no restrictions,or at best few restrictions on how factors of production can be employed.

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

A production possibilities frontier with a bowed outward shape indicates

The natural resources used in production are made available in the

What is the difference between product markets and factor markets?

If the production possibilities frontier is ________,then opportunity costs are constant as more of one good is produced.

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 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 secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

Rayburn Reed is a highly talented photographer.He has chosen to specialize in photography because of all of the following except

Which of the following statements about an entrepreneur is false?

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

The ________ demonstrates the roles played by households and firms in the market system.

The points outside the production possibilities frontier 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 South Korea's opportunity cost of producing one pound of wheat?