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

Figure 2-8 -Refer to Figure 2-8.One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M.What is market K and who are economic agents M?

Crude oil is not an example of a factor of production,but when crude oil is processed into gasoline,it is a factor of production.

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.What is the opportunity cost of one pound of meat?

The attainable production points on a production possibility curve are

Which of the following is not a factor of production?

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 pound of cashews in Indonesia?

In 18th century Europe,governments gave guilds legal authority to limit production of goods.Did this authority obstruct or improve the market mechanism and how?

Figure 2-6 General Motors recently approved for production the Cadillac Converj,an electric car based on its Chevy Volt.The Converj will feature a "Generation 1.5 Voltec" powertrain,with a hybrid engine that runs on a combination of electricity and gasoline.Assume GM chooses to produce both hybrid-engine vehicles and gasoline-engine vehicles for its Cadillac brand.Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-6.Assume that in 2011,GM was able to reopen one of its factories after an extensive remodelling which now allows for the production of both types of vehicles.This is best represented by the

All of the following are critical functions of the government in facilitating the operation of a market economy except

The U.S.government provides health care to about 30 percent of the population through programs such as Medicare and Medicaid.The Congressional Budget Office estimates that as the U.S.population ages and medical costs continue to rise,federal government spending on Medicare will

Figure 2-6 General Motors recently approved for production the Cadillac Converj,an electric car based on its Chevy Volt.The Converj will feature a "Generation 1.5 Voltec" powertrain,with a hybrid engine that runs on a combination of electricity and gasoline.Assume GM chooses to produce both hybrid-engine vehicles and gasoline-engine vehicles for its Cadillac brand.Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-6.In response to changing consumer demands,GM has cut back on the production of hybrids and increased its production of gasoline-powered vehicles.This strategy is best represented by the

On a diagram of a production possibility frontier,opportunity cost is represented by the production possibility frontier shifting outward.

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.Suppose Mendonca is currently producing 60 pounds of vegetables per period.How much meat is it also producing,assuming that resources are fully utilized?

Which of the following statements about an entrepreneur is false?

Comparative advantage means the ability to produce a good or service

An example of a factor of production is

Figure 2-11 -Refer to Figure 2-11.Which two arrows in the diagram depict the following transaction: Dorian Gray hires "Wild Oscar",a professional portrait artist,to paint his picture.

How does Adam Smith's idea of the "invisible hand" apply to the various parts,made by many different manufacturers in many different countries,that are used by Apple to produce an iPad?

Figure 2-9 -Refer to Figure 2-9.One segment of the circular flow diagram in the figure shows the flow of goods and services from market C to economic agents A.What is market C and who are economic agents A?

Which of the following statements is true?