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

When you purchase a new pair of jeans you do so in the

An outward shift of a nation's production possibilities frontier represents

Suppose in Belize,the opportunity cost of producing a sailboat is 5 hang gliders.In Honduras,the opportunity cost of producing a sailboat is 8 hang gliders. a.What is the opportunity cost of producing a hang glider for Belize? b.What is the opportunity cost of producing a hang glider for Honduras? c.Which country has a comparative advantage in the production of hang gliders? d.Which country has a comparative advantage in the production of sailboats?

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.What is the opportunity cost of producing 1 pound of cashews in Pakistan?

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.The linear production possibilities frontier in the figure indicates that

In the circular flow model,households supply resources such as labor services in the product market.

What is a production possibilities frontier? What do points along the frontier represent? What do points inside and outside the frontier represent?

Scarcity

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

All of the following are critical functions of the government in facilitating the operation of a market economy except

Comparative advantage means the ability to produce a good or service

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 meat?

Consider the following items: a.the novel "The DaVinci Code" by Dan Brown B)the "The Spirited Shipper",an innovative wine shipping box C)a Swiss chef's award-winning recipe D)an original fabric design,for example,the fabric used for "Coach" bags and luggage Which of the items listed is an example of intellectual property? A) a and b only B) a, b, and c C) a and d only D) all of the items listed

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 24 pizzas and 15 calzones would appear

Households

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.Suppose Mendonca is currently producing 60 pounds of vegetables per period.How much meat is it also producing,assuming that resources are fully utilized?

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 24 pizzas and 30 calzones would appear

Figure 2-6 General Motors recently approved for production the Cadillac Converj, an electric car based on its Chevy Volt. The Converj will feature a "Generation 1.5 Voltec" powertrain, with a hybrid engine that runs on a combination of electricity and gasoline. Assume GM chooses to produce both hybrid-engine vehicles and gasoline-engine vehicles for its Cadillac brand. Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-6.Assume a technological advancement greatly reduces the cost to produce hybrid-engine vehicles.This is best represented by the

How does Adam Smith's idea of the "invisible hand" apply to the various parts,made by many different manufacturers in many different countries,that are used by Apple to produce an iPad?

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?