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

a.Draw a production possibilities frontier for a country that produces two goods,beer and pretzels.Assume that resources are equally suited to both tasks. b.Define opportunity costs. c.Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.

Any output combination along a production possibilities frontier is associated with fully utilized resources.

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.an increase in the patent protection period to 30 years B.an increase of a nation's capital stock C.an improved property rights system Which of the events listed above could cause a movement from V to W?

The resource income earned by those who supply ________ is called wages.

An increase in the labor force shifts the production possibilities frontier inwards over time.

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.

Consider the following items: a.the novel "The Girl On The Train" by Paula Hawkins B.the "The Spirited Shipper," an innovative wine shipping box C.a Swiss chef's award-winning recipe D.an original fabric design,for example,the fabric used for "Coach" bags and luggage Which of the items listed is an example of intellectual property?

In a two-good,two country world,if one country has an absolute advantage in the production of both goods,it must also have a comparative advantage in the production of both goods.

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?

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?

Why are music,television,and movie companies concerned about their products being posted to Internet Web sites such as YouTube?

Figure 2-15 -Refer to Figure 2-15.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?

Apple recently announced that the company is exploring the electric vehicle market,and is looking to produce vehicles as early as 2020.Assume Apple chooses to produce both traditional electric-engine vehicles and self-driving electric-engine vehicles.Figure 2-7 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Suppose worker productivity increases so that the total number of vehicles produced increases as the company adds more machinery,workers,and changes the layout of the factory.This is best represented by the

In the circular flow model,producers

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.Which of the following statements is true?

One Wristwatch Rice (per pound) Japan 50 hours 2 hours Thailand 30 hours 1.5 hours Table 2-20 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-20.Thailand has a comparative advantage in the production of

Tammi Horace Dogs Groomed 20 12 Cats Bathed 10 8 Table 2-13 shows the output per day of two pet groomers,Tammi and Horace.They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-13.What is Horace's opportunity cost of grooming a dog?

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by

If Sanjaya can shuck more oysters in one hour than Tatiana,then Sanjaya has a comparative advantage in shucking oysters.

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.What is George's opportunity cost of mowing a lawn?