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

Which of the following is a factor of production?

All of the following are examples of spending on goods and services in the circular flow model except

Table 2-1 Production choices for Tomaso's Trattoria Choice Quantity of Pizzas Produced Quantity of Calzones Produced A 48 0 B 36 15 C 24 30 D 12 45 E 0 60 -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.

________ behavioral assumption about humans was that people usually act in a rational,self-interested way.

Is it possible for a firm to have a comparative advantage in producing something without having an absolute advantage? Why or why not?

Figure 2-12 shows the production possibilities frontiers for Tahiti and Bora Bora.Each country produces two goods,milk and honey. -Refer to Figure 2-12.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 milk?

If Tanisha can audit more tax returns in one hour than Libby,then Tanisha has an absolute advantage in auditing tax returns.

As women's wages have risen relative to men's wages,the opportunity cost to women of doing housework has ________ than has the opportunity cost to men.

Which of the following is not a factor of production?

One Motorcycle One Guitar Ireland 20 hours 4 hours Scotland 8 hours 2 hours Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14.Scotland has a comparative advantage in the production of

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

Which of the following is an example of spending on goods and services in the circular flow model?

If a country produces only two goods,then it is not possible to have a comparative advantage in the production of both those goods.

According to the production possibilities model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

Figure 2-8 above shows the production possibilities frontier for Vidalia,a nation that produces two goods,roses and orchids. -Refer to Figure 2-8.Suppose Vidalia is currently producing 120 dozen roses per period.How many orchids is it also producing,assuming that resources are fully utilized?

It is not possible to have a comparative advantage in producing a good or service without having an absolute advantage.

George Jack Lawns Mowed 10 6 Gardens Cultivated 5 4 Table 2-15 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-15.Which of the following statements is true?

________ exists because unlimited wants exceed the limited resources available to fulfill those wants.

According to the production possibilities model,if more resources are allocated to the production of physical and human capital,then all of the following are likely to happen except

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.If Mendonca chooses to produce 160 pounds of vegetables,how much meat can it produce to maximize production?