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

Table 2-3 Table 2-3 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 2-3.What is Haley's opportunity cost of making a bracelet?

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?

Adam Smith's behavioral assumption about humans was that people

Table 2-3 Table 2-3 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 2-3.Which of the following statements is true?

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

All of the following countries come close to the free market benchmark except

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except

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?

When you purchase a new pair of jeans you do so in the

Scarcity

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 pound of wheat?

Any output combination outside a production possibility frontier is associated with unused or underutilized resources.

The natural resources used in production are made available in the

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.an increase in the unemployment rate B.a decrease in a nation's money supply C.a war that kills a significant portion of a nation's population Which of the events listed above could cause a movement from Y to W ?

The production possibilities frontier model shows that

Figure 2-2 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.The linear production possibilities frontier in the figure indicates that

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

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.Which country has a comparative advantage in the production of cotton?

If society decides it wants more of one good and all resources are fully utilized,then

BMW recently decided to build a manufacturing plant in Shenyang,China.At this plant,BMW is able to take advantage of paying lower wages to its Chinese workers than it pays its German workers,but it also sacrifices the high levels of technical training possessed by its German workers.In deciding to open the Shenyang plant,BMW