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

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.What is Serena's opportunity cost of making a necklace?

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.If the two countries specialize and trade,who should export guitars?

Consider a country that produces only two goods: kayaks and coconuts.Suppose it is possible for this country to increase its production of kayaks without producing fewer coconuts.In this case,its current output combination is efficient.

Consider the following items: a.the album "21" by Adele b.a Dutch horticulturalist's new method for cultivating hybrid tulips c.Rolls Royce's "Spirit of Ecstasy" hood ornament design d.the sale of Tumi luggage at a Macy's department store Which of the items listed is an example of intellectual property?

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.Which of the following statements is true?

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?

Suppose your expenses for this term are as follows: tuition: $28,000,room and board: $9,000,books and other educational supplies: $2,500.Further,during the term,you can only work part-time and earn $16,000 instead of your full-time salary of $42,000.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?

The resource income earned by those who supply ________ is called wages.

Figure 2-10 Figure 2-10 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. -Refer to Figure 2-10.What is the opportunity cost of producing one gallon of honey in Bora Bora?

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

In a free market there are significant restrictions on how a good or service can be produced or sold.

You have an absolute advantage whenever you

The basis for trade is comparative advantage,not absolute advantage.

Figure 2-7 Mercedes Benz recently decided to introduce its B-class automobile in the U.S. market, an electric car that is has designed and developed in a partnership with Tesla Motors. Assume Mercedes Benz chooses to produce both electric-engine vehicles and gasoline-engine vehicles. Figure 2-7 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Assume that in 2014,Mercedes reopened one of its factories after an extensive remodelling which now allows for the production of both types of vehicles.This is best represented by the

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.

If the best surgeon in town is also the best at cleaning swimming pools,then according to economic reasoning,this person should

The natural resources used in production are made available in the

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?

Figure 2-6 -Refer to Figure 2-6.If the economy is currently producing at point E,what is the opportunity cost of moving to point D?