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

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 events: a.a decrease in the unemployment rate B.general technological advancement C.an increase in consumer wealth Which of the events listed above could cause a movement from V to X?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ could occur because of additional government restrictions toward allowing immigrant labor.

Suppose there is some unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

Without technological advancement,how can a nation achieve economic growth?

Which of the following is not a flow in the circular flow model?

If society decides it wants more of one good and ________,then it has to give up some of another good and incur some opportunity costs.

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

If the opportunity cost of producing more of one good increases as more of that good is produced,then the production method is inefficient.

Identify whether each of the following transactions will take place in the factor market or in the product market: a.Shondra buys a Harley-Davidson Softail motorcycle. b.Aimee works 20 hours a week at a grocery store. c.Gustavo sells a warehouse to a produce delivery company. d.Ocean Spray increases employment at its Middleboro,Massachusetts plant.

If a country produces only two goods,it is possible to have an absolute advantage in the production of both goods.

If Blake can pick more cherries in one hour than Cody,then Blake has a comparative advantage in cherry picking.

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

Table 2-11 -Refer to Table 2-11.This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. a.Which country has an absolute advantage in the production of cell phones? b.Which country has an absolute advantage in the production of lumber? c.What is Estonia's opportunity cost of producing one cell phone? d.What is Finland's opportunity cost of producing one cell phone? e.What is Estonia's opportunity cost of producing one board foot of lumber? f.What is Finland's opportunity cost of producing one board foot of lumber? g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce cell phones? h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce lumber?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.A movement from ________ is the result of additional government restrictions on the pollution that results from plastic production.

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.Which of the following statements is true?

What causes a production possibilities frontier to shift outward?

The ability to exercise control over one's own resources within the confines of the law refers to

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 events: a.an increase in the unemployment rate B.a decrease in a nation's money supply C.a war that kills a significant portion of a nation's population Which of the events listed above could cause a movement from Z to X?

Why are music,television,and movie companies concerned about their products being posted to Internet Web sites such as YouTube?

Consider a country that produces only two goods: pineapples and tractors.Suppose it is possible for this country to increase its production of pineapples without producing fewer tractors.In this case,its current output combination is inefficient.