A) purchase final goods and services in the factor market. B) purchase final goods and services in the product market. C) purchase resources in the product market. D) purchase resources in the factor market. A) purchase final goods and services in the factor market. B) purchase final goods and services in the product market. C) purchase resources in the product market. D) purchase resources in the factor market.

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

On a diagram of a production possibilities frontier,economic decline (negative growth)is represented by the production possibilities frontier shifting inward.

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Question 1

Correct Answer:

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True

a.Draw a production possibilities frontier for a country that produces two goods,wine and cheese.Assume that resources are not equally suited to both tasks. b.Define opportunity costs. c.Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.

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Question 2

Correct Answer:

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a.The PPF is concave (bowed away from the origin)to reflect the fact that resources are not equally suited to both tasks. b.Opportunity cost is defined as the highest valued alternative that must be forgone by taking an action.
c.In the PPF graph in part (a),suppose the country is currently producing at point A and wishes to move to point B so that it can produce more wine.The only way it can obtain more wine is to give up some amount of cheese.

What does the term "increasing marginal opportunity cost" mean? How are increasing marginal opportunity costs represented on a bowed out production possibilities frontier?

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Question 3

Correct Answer:

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Increasing marginal opportunity costs means that as more and more of a product is made,the opportunity cost of making each additional unit rises.They are represented by moving down a bowed out production possibilities frontier.

If additional units of a good could be produced at a constant opportunity cost,the production possibilities frontier would be linear.

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Question 4

Is it possible for a firm to have a comparative advantage in producing something without having an absolute advantage? Why or why not?

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Question 5

Table 2-8 Table 2-8 shows the output per month of two people,Wilma and Betty.They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-8.What is Betty's opportunity cost of making a statue?

(Multiple Choice)

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Question 6

If Abigail can make more candles in one day than Pierre,then Abigail has an absolute advantage in making candles.

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Question 7

In the circular flow model,households demand resources such as labor services in the product market.

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Question 8

________ exists because unlimited wants exceed the limited resources available to fulfill those wants.

(Multiple Choice)

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Question 9

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.Which of the following statements is true?

(Multiple Choice)

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Question 10

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point Y,what is the opportunity cost of moving to point X?

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Question 11

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

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Question 12

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 25 hot wings would appear

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Question 13

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.Which of the following statements is true?

(Multiple Choice)

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Question 14

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is George's opportunity cost of mowing a lawn?

(Multiple Choice)

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Question 15

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is George's opportunity cost of cultivating a garden?

(Multiple Choice)

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Question 16

Table 2-7 Table 2-7 shows the output per week of two people,Minnie and Mickey.They can either devote their time to making hats or making umbrellas. -Refer to Table 2-7.What is Mickey's opportunity cost of making an umbrella?

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Question 17

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-9.What is the opportunity cost of producing 1 snow cone in Iceland?

(Multiple Choice)

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Question 18

Households

(Multiple Choice)

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Question 19

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is Jack's opportunity cost of mowing a lawn?

(Multiple Choice)

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Question 20

Showing 1 - 20 of 237

On a diagram of a production possibilities frontier,economic decline (negative growth)is represented by the production possibilities frontier shifting inward.

a.Draw a production possibilities frontier for a country that produces two goods,wine and cheese.Assume that resources are not equally suited to both tasks. b.Define opportunity costs. c.Use your production possibilities frontier graph to demonstrate the principle of opportunity costs.

What does the term "increasing marginal opportunity cost" mean? How are increasing marginal opportunity costs represented on a bowed out production possibilities frontier?

If additional units of a good could be produced at a constant opportunity cost,the production possibilities frontier would be linear.

Is it possible for a firm to have a comparative advantage in producing something without having an absolute advantage? Why or why not?

Table 2-8 Table 2-8 shows the output per month of two people,Wilma and Betty.They can either devote their time to making marble statues or making marble benches. -Refer to Table 2-8.What is Betty's opportunity cost of making a statue?

If Abigail can make more candles in one day than Pierre,then Abigail has an absolute advantage in making candles.

In the circular flow model,households demand resources such as labor services in the product market.

________ exists because unlimited wants exceed the limited resources available to fulfill those wants.

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.Which of the following statements is true?

Figure 2-5 -Refer to Figure 2-5.If the economy is currently producing at point Y,what is the opportunity cost of moving to point X?

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

Table 2-1 Production Choices for Dina's Diner -Refer to Table 2-1.Assume Dina's Diner only produces sliders and hot wings.A combination of 40 sliders and 25 hot wings would appear

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.Which of the following statements is true?

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is George's opportunity cost of mowing a lawn?

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is George's opportunity cost of cultivating a garden?

Table 2-7 Table 2-7 shows the output per week of two people,Minnie and Mickey.They can either devote their time to making hats or making umbrellas. -Refer to Table 2-7.What is Mickey's opportunity cost of making an umbrella?

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland.Each country produces two goods,snow cones and popsicles. -Refer to Figure 2-9.What is the opportunity cost of producing 1 snow cone in Iceland?

Households

Table 2-4 Table 2-4 shows the output per day of two gardeners,George and Jack.They can either devote their time to mowing lawns or cultivating gardens. -Refer to Table 2-4.What is Jack's opportunity cost of mowing a lawn?

Economics: Foundations and Models

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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