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

If a vineyard wants to raise funds to purchase a new bottling machine,it does so in the

Fred Barney Pogo Sticks 24 28 Unicycles 8 14 Table 2-10 shows the output per month of two people,Fred and Barney.They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2-10.Which of the following statements is true?

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 Betty's opportunity cost of making a statue?

Figure 2-10 -Refer to Figure 2-10.If the economy is currently producing at point E,what is the opportunity cost of moving to point D?

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew are a factor of production.

A worker is hired in a

If a country is producing efficiently and is on the production possibilities frontier,the only way to produce more of one good is to produce less of the other.

Figure 2-18 -Refer to Figure 2-18.Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

Table 2-2 Production choices for Billie's Bedroom Shop Choice Quantity of Pillows Produced Quantity of Blankets Produced A 36 0 B 27 7 C 18 14 D 9 21 E 0 28 -Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

What is an entrepreneur?

Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.Consider the following movements: a.from point V to point W B.from point W to point Y C.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?

Figure 2-10 -Refer to Figure 2-10.If the economy is currently producing at point E,what is the opportunity cost of moving to point B?

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

For a person to have a comparative advantage in producing a product,she must be able to produce that product at a lower opportunity cost than her competitors.

Suppose your expenses for this term are as follows: tuition: $12,000,room and board: $6,500,books and other educational supplies: $1,500.Further,during the term,you can only work part-time and earn $3,500 instead of your full-time salary of $14,000.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?

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 that displays increasing opportunity costs?

Comparative advantage means the ability to produce a good or service

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 W?

One Digital Camera Wheat (per pound) China 100 hours 4 hours South Korea 60 hours 3 hours Table 2-11 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 2-11.South Korea has a comparative advantage in the production of

For each bottle of wine that Italy produces,it gives up the opportunity to make 10 pounds of cheese.France can produce 1 bottle of wine for every 25 pounds of cheese it produces.Which of the following is true about the comparative advantage between the two countries?