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

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 24 ascots and 12 bowties would appear

If property rights are not well enforced,all of the following are likely to occur except

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.What is Thailand's opportunity cost of producing one wristwatch?

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 both plastic production and food production?

Figure 2-3 -Refer to Figure 2-3.Carlos Vanya grows tomatoes and strawberries on his land.His land is equally suited for growing either fruit.Which of the graphs in Figure 2-3 represents his production possibilities frontier?

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 patent protection period to 75 years B.a hurricane that destroys a substantial portion of a nation's capital stock C.the implementation of a secure and enforceable property rights system Which of the events listed above could cause a movement from W to Z?

Define the term "property rights." Explain why the lack of well-defined and enforceable property rights is detrimental to the smooth functioning of a market system.

What causes a production possibilities frontier to shift inward?

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 50 hot wings would appear

On a diagram of a production possibilities frontier,opportunity cost is represented by the slope of the production possibilities frontier.

A worker is hired in a

Which of the following is a factor of production?

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

Table 2-3 -Refer to Table 2-3.The Nut House produces only cashews and almonds.The table above shows the maximum possible output combinations of the two nuts using all resources and currently available technology. a.Graph The Nut House's production possibilities frontier.Put almonds on the horizontal axis and cashews on the vertical axis.Be sure to identify the output combination points on your diagram. b.Suppose The Nut House is currently producing at point C.What is the opportunity cost of producing an additional 12,000 pounds of almonds? c.Suppose The Nut House is currently producing at point C.What happens to the opportunity cost of producing more and more almonds? Does it increase,decrease or remain constant? Explain your answer. d.Suppose The Nut House is currently producing at point F.What happens to the opportunity cost of producing more and more cashews? Does it increase,decrease or remain constant? Explain your answer. e.Suppose The Nut House is plagued by a variety of white root-rot disease,which destroys cashew trees but not almond trees.Show in a graph what happens to its PPF.

The payment received by suppliers of entrepreneurial skills is called rent.

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.If Vidalia chooses to produce 40 dozen orchids,how many roses can it produce to maximize production?

Table 2-5 Table 2-5 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. -Refer to Table 2-5.Estonia has a comparative advantage in the production of

According to the production possibilities model,if more resources are allocated to the production of physical and human capital,then all of the following are likely to happen except

Figure 2-7 Apple recently announced that the company is exploring the electric vehicle market,and is looking to produce vehicles as early as 2020.Assume Apple chooses to produce both traditional electric-engine vehicles and self-driving electric-engine vehicles.Figure 2-7 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions. -Refer to Figure 2-7.Assume that in response to changing consumer demands,Apple cuts back on the production of self-driving automobiles and increases its production of traditional automobiles.This strategy is best represented by the

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?