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

Figure 2-11 -Refer to Figure 2-11.Which two arrows in the diagram depict the following transaction: Barney earns $250 for selling scissors and razors to Floyd's Barber Shop.

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 necklace?

What shape does a production possibilities frontier take if it displays increasing opportunity costs? What shape does a production possibilities frontier take if it displays constant opportunity costs? Which shape is most common in production situations?

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

Figure 2-8 -Refer to Figure 2-8.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?

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.

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 necklace?

An organization of producers that limits the amount of a good produced is known as a

All of the following are examples of spending on factors of production in the circular flow model except

Each person goes about her daily business seeking to maximize her own self interests.In doing so,she contributes to the welfare of society at large.This is the idea underlying Adam Smith's "invisible hand."

The slope of a production possibilities frontier

A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier.

The ________ demonstrates the roles played by households and firms in 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.Which of the following statements is true?

The Great Depression of the 1930s with a large number of workers and factories unemployed would be represented in a production possibilities frontier graph by

You have an absolute advantage whenever you

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.China has a comparative advantage in the production of

The principle of opportunity cost is that

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

Households ________ final goods and services in the ________ market.