Exam 8: Gains From Trade

(Table: Both Joyce and Simeon can cook) Both Joyce and Simeon can cook chicken gumbo and pork chops. Use the data to answer the question. What will be the total output of chicken gumbo and pork chops if Joyce and Simeon each work for 24 hours on the task for which they each have a comparative advantage?

As prices _____, they provide useful business intelligence.

Specialization will increase output when it is based on:

What is the function of the markets?

Which of the following benefits could a company gain from using internal markets?

(Table: Cooking time) The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry. Which statement explains who has a comparative advantage in cooking chicken curry?

Which of the following is TRUE when the price is functioning as a signal?

(Table: Shrimp and Banana Production Possibilities) Use Table: Shrimp and Banana Production Possibilities. The table shows the maximum number of shrimp and bananas that Issa and Lawrence can produce if they produce only one good. In the absence of trade, Issa produces and consumes nine shrimp and two bananas, and Lawrence produces and consumes three shrimp and two bananas. Now they decide to engage in trade. Which statement is INCORRECT? ? ? Table: Shrimp and Bananas Production Possibilities Shrimp Bananas Issa 12 8 Lawrence 5 5

(Table: Maia and Juanita's opportunity cost) The table provides data on how long it takes Maia and Juanita to mow the lawn and weed the flower beds. Who has a comparative advantage in weeding the flower beds?

Marius and Jennifer are going to sell cupcakes and muffins at their third annual fundraiser bake sale. In one day, Marius can make 40 cupcakes or 20 muffins, and Jennifer can make 15 cupcakes or 15 muffins. With specialization, _____ cupcakes and _____ muffins will be made in one day.

How does the accuracy of prediction markets compare to public opinion polls?

Markets allocate

(Table: Cooking times). The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry. Marla's opportunity cost of making chicken curry is _____, and Jason's opportunity cost is _____.

When a manager sets up markets within the company to buy and sell scarce resources, these markets are called

The benefits that come from reallocating resources, goods, and services to better uses when trade occurs are called

Internal markets, which are markets that managers set up within their organization, are:

Which of the following statements is FALSE?

Jamie must give up the production of 100 ties to produce 50 additional sweaters. The opportunity cost of producing four ties is _____ sweater(s).

(Table: Fazio and Gabriella's opportunity cost) The table provides data on how long it takes Fazio and Gabriella each to learn to play a particular new song on the piano and to complete a given person's tax return. Use the data to answer the question. Which statement explains who has a comparative advantage in completing tax returns?

When everyone produces according to their comparative advantage, then they