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

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

Table 2-1 Production choices for Tomaso's Trattoria -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.

What is a production possibilities frontier? What do points along the frontier represent? What do points inside and outside the frontier represent?

A major factor contributing to the slow growth rate of less developed economies is

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 Serena's opportunity cost of making a bracelet?

Which of the following is a flow in the circular flow model?

In a free market there are virtually no restrictions,or at best few restrictions on how factors of production can be employed.

If opportunity costs are constant,the production possibilities frontier would be graphed as

What is meant by the term "free market"?

Adam Smith's invisible hand refers to

If additional units of a good could be produced at a constant opportunity cost,the production possibility frontier would be bowed outward (concave).

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?

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?

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 South Korea's opportunity cost of producing one pound of wheat?

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 Indonesia?

Figure 2-1 -Refer to Figure 2-1.Point C is

An inward shift of a nation's production possibilities frontier can occur due to

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 Y to Z

If a country produces only two goods,it is possible to have a comparative advantage in the production of both those goods.

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