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

Which of the following are separate flows in the circular flow model?

Table 2-16 -Refer to Table 2-16.This table shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. a. Which country has an absolute advantage in the production of motorcycles? b. Which country has an absolute advantage in the production of guitars? c. What is Ireland's opportunity cost of producing one motorcycle? d. What is Scotland's opportunity cost of producing one motorcycle? e. What is Ireland's opportunity cost of producing one guitar? f. What is Scotland's opportunity cost of producing one guitar? g. If each country specializes in the production of the product in which it has a comparative advantage,who should produce motorcycles? h. If each country specializes in the production of the product in which it has a comparative advantage,who should produce guitars?

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?

Table 2-8 Table 2-8 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 2-8.South Korea has a comparative advantage in the production of

Figure 2-11 -Refer to Figure 2-11.One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J.What is market K and who are economic agents J?

What is an entrepreneur?

Because the copyright on the L.Frank Baum book The Wonderful Wizard of Oz expired many years ago,the actual written words from the book are in the public domain.Publishers who now choose to sell their own versions of the book

If additional units of a good could be produced at a constant opportunity cost,the production possibility frontier would be bowed outward (concave).

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?

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 14 blankets would appear

Households

On a diagram of a production possibility frontier,opportunity cost is represented by the production possibility frontier shifting outward.

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?

What is meant by the term opportunity cost?

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

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

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 milk in Bora Bora?

Table 2-8 Table 2-8 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 2-8.Does either China or South Korea have an absolute advantage and if so,in what product?

An organization of producers that limits the amount of a good produced is known as a