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

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.What is Lucy's opportunity cost of making a tricycle?

Figure 2-6 -Refer to Figure 2-6.If the economy is currently producing at point E,what is the opportunity cost of moving to point D?

The resource income earned by those who supply labor services is called

Table 2-2 Production choices for Nadia's Neckware -Refer to Table 2-2.Assume Nadia's Neckware only produces ascots and bowties.A combination of 16 ascots and 6 bowties would appear

Figure 2-12 -Refer to Figure 2-12.One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G.The funds represent spending on goods and services.What is market F and who are economic agents G?

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.What is the opportunity cost of one dozen roses?

Should countries specialize in producing goods and services based on having a comparative advantage or an absolute advantage? Why?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.Consider the following movements: a.from point V to point W B.from point W to point Y C.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?

Suppose in Belgium,the opportunity cost of producing a trombone is 8 clarinets.In Denmark,the opportunity cost of producing a trombone is 6 clarinets. a.What is the opportunity cost of producing a clarinet for Belgium? b.What is the opportunity cost of producing a clarinet for Denmark? c.Which country has a comparative advantage in the production of clarinets? d.Which country has a comparative advantage in the production of trombones?

Suppose your expenses for this term are as follows: tuition: $9,000,room and board: $1,500,books and other educational supplies: $1,000.Further,during the term,you can only work part-time and earn $3,000 instead of your full-time salary of $8,000.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?

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.Which of the following statements is true?

Figure 2-8 Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-8.What is the opportunity cost of producing 1 ton of coconuts in Guatemala?

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

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.The linear production possibilities frontier in the figure indicates that

Figure 2-13 -Refer to Figure 2-13.Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company,to paint her home.

Figure 2-10 -Refer to Figure 2-10.In the circular flow diagram,market K represents

In a simple circular flow diagram,who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?

If a country is producing efficiently and is on the production possibilities frontier,producing more of one good would result in a movement along the frontier.

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days.This statement suggests that

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 Wilma's opportunity cost of making a statue?