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

Table 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.What is Guatemala's opportunity cost of producing one canoe?

Each person goes about her daily business seeking to maximize her own self interests.In doing so,she contributes to the welfare of society at large.This is the idea underlying Adam Smith's "invisible hand."

Adam Smith's invisible hand refers to

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.

Figure 2-13 -Refer to Figure 2-13.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?

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 2-14 -Refer to Figure 2-14.Which two arrows in the diagram depict the following transaction: Myrna earns $450 for working at HempHill's Drug Store.

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.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?

Table 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.What is Guatemala's opportunity cost of producing one sailboat?

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.

In the circular flow model,households demand resources such as labor services in the factor market.

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.What is Scotland's opportunity cost of producing one guitar?

Table 2-6 Table 2-6 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 2-6.Which of the following statements is true?

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

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?

Figure 2-14 -Refer to Figure 2-14.Which two arrows in the diagram depict the following transaction: Dorian Gray hires "Wild Oscar," a professional portrait artist,to paint his picture.

Table 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.If the two countries specialize and trade,who should export sailboats?

Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 pies,what is the opportunity cost of baking an additional 15 cakes?

Table 2-10 Table 2-10 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-10.What is Horace's opportunity cost of bathing a cat?

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