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

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

Figure 2-12 -Refer to Figure 2-12.One segment of the circular flow diagram in the figure shows the flow of goods and services from market C to economic agents A.What is market C and who are economic agents A?

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

What is comparative advantage? What is absolute advantage?

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.A combination of 9 pillows and 21 blankets would appear

If opportunity costs are constant,the production possibilities frontier would be graphed as

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from Y to Z

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

In economics,the term "free market" refers to a market where products are traded but not sold.

________ marginal opportunity cost implies that the more resources already devoted to any activity,the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

Identify whether each of the following transactions will take place in the factor market or in the product market. a.Graciela buys a Tesla Motors Model X. b.Lashan works 60 hours a week at a law firm. c.Tito sells his family's farmland to a housing developer. d.Tesla Motors increases employment at its Fremont,California plant.

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

The attainable production points on a production possibility curve are

If a commercial dairy farm wants to raise funds to purchase feeding troughs,it does so in the

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 canoes?

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 motorcycles?

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-9.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of cotton?

Table 2-3 Production Choices for Dina's Diner -Refer to Table 2-3.Assume Dina's Diner only produces sliders and hot wings.A combination of 120 sliders and 100 hot wings would appear

In the circular flow model,producers