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

As job opportunities for women and the wages those jobs pay have increased,the opportunity cost of doing housework has ________,so many families have chosen to hire specialists in households chores,such as cleaning services and lawn care services,because the cost of these specialists is ________ than the cost of the wife (or husband)performing those chores.

Table 2-5 Production choices for Nadia's Neckware Choice Quantity of Ascots Produced Quantity of Bowties Produced A 32 0 B 24 6 C 16 12 D 8 18 E 0 24 -Refer to Table 2-5.Assume Nadia's Neckties only produces ascots and bowties.Nadia faces ________ opportunity costs in the production of ascots and bowties.

________ 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.

A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced.

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

Table 2-4 Production Choices for Dina's Diner Choice Quantity of Sliders Produced Quantity of Hot Wings Produced A 80 0 B 60 25 C 40 50 D 20 75 E 0 100 -Refer to Table 2-4.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 25 hot wings would appear

Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-13.What is the opportunity cost of producing 1 ton of pineapples in Guatemala?

Figure 2-14 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-14.What is the opportunity cost of producing 1 snow cone in Greenland?

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

The ________ production points on a production possibilities frontier are the points along and inside the production possibilities frontier.

One Cande One Sailbat Guaternala 10 hours 60 hours Honduras 15 hours 75 hours Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12.If the two countries specialize and trade,who should export canoes?

Serena Haley Bracelets 8 9 Necklaces 16 12 Table 2-9 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 2-9.What is Serena's opportunity cost of making a bracelet?

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

Households

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?

Figure 2-14 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-14.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 popsicles?

Which of the following is an example of spending on factors of production in the circular flow model?

Wilma Betty Statues 12 14 Benches 4 7 Table 2-19 shows the output per month of two people,Wilma and Betty.They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-19.What is Wilma's opportunity cost of making a bench?

One Cande One Sailbat Guaternala 10 hours 60 hours Honduras 15 hours 75 hours Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12.Does either Guatemala or Honduras have an absolute advantage and if so,in what product?

Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes.If he now produces 30 bird houses and 15 wind chimes,what is the opportunity cost of producing an additional 10 wind chimes?