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

The production possibilities frontier model assumes which of the following?

The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources.

Figure 2-7 Figure 2-7 shows the production possibilities frontiers for Pakistan and Indonesia.Each country produces two goods,cotton and cashews. -Refer to Figure 2-7.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

Increasing opportunity cost is represented by a ________ production possibilities frontier.

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?

If the best surgeon in town is also the best at cleaning swimming pools,then according to economic reasoning,this person should

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

Table 2-4 Table 2-4 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 2-4.What is China's opportunity cost of producing one digital camera?

To increase gas mileage,automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage.These facts suggest that a negative relationship exists between safety and gas mileage.

Which of the following would shift a nation's production possibilities frontier outward?

The term "property rights" refers to

Suppose in Belize,the opportunity cost of producing a sailboat is 5 hang gliders.In Honduras,the opportunity cost of producing a sailboat is 8 hang gliders. a.What is the opportunity cost of producing a hang glider for Belize? b.What is the opportunity cost of producing a hang glider for Honduras? c.Which country has a comparative advantage in the production of hang gliders? d.Which country has a comparative advantage in the production of sailboats?

A successful market economy requires

How do firms and households interact in markets?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from X to Y

Figure 2-7 Figure 2-7 shows the production possibilities frontiers for Pakistan and Indonesia.Each country produces two goods,cotton and cashews. -Refer to Figure 2-7.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 cotton?

Stricter laws and regulations to protect intellectual property rights

It is possible to have a comparative advantage in producing a good or service without having an absolute advantage.

In a two-good,two country world,if one country has an absolute advantage in the production of both goods,it cannot benefit by trading with the other country.

If a nation changes its laws to more actively enforce intellectual property rights,all of the following will most likely take place except