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

Figure 2-13 -Refer to Figure 2-13.Which two arrows in the diagram depict the following transaction: Stanley purchases the novel,"Night of Sorrows" for his summer reading pleasure.

Individuals who have never been the best at doing anything

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia,a nation that produces two goods,roses and orchids. -Refer to Figure 2-2.Suppose Vidalia is currently producing 20 dozen orchids per period.How many roses is it also producing,assuming that resources are fully utilized?

An inward shift of the production possibilities frontier represents

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. -Refer to Table 2-9.If the two countries specialize and trade,who should export rice?

It is not possible to have a comparative advantage in producing a good or service without having an absolute advantage.

A guild is

In economics,the term "free market" refers to a market where no sales tax is imposed on products sold.

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

If opportunity costs are ________,the production possibilities frontier would be graphed as a negatively sloped straight line.

Comparative advantage means

Figure 2-11 -Refer to Figure 2-11.In the circular flow diagram,who are economic agents A and who are economic agents B?

If the production possibilities frontier is linear,then

Table 2-6 Table 2-6 shows the output per week of two people,James and Lucy.They can either devote their time to making wagons or making tricycles. -Refer to Table 2-6.Which of the following statements is true?

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 60 sliders and 50 hot wings would appear

In a two-good,two country world,if one country has a comparative advantage in the production of one good,it can benefit by trading with the other country.

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.If the two countries have the same amount of resources and the same technological knowledge,which country has an absolute advantage in the production of popsicles?

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

If additional units of a good are produced at an increasing opportunity cost,the production possibilities frontier would be bowed outward (concave).

A stand of redwood trees is not an example of a factor of production but the harvested and processed redwood is a factor of production.