Exam 2: Production Possibilities and Opportunity Costs

Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product. -In Exhibit B-1 Canary Island has a comparative advantage in the production of coconuts.

-Exhibit B-3 shows an economy's production possibilities table. As additional units of capital goods are produced, the opportunity cost in terms of sacrificed units ofconsumption goods ________ because of __________.

The economic problem associated with the idea of scarcity is that

Specialization leads to

-In Exhibit B-15, the opportunity cost in moving from point U to point B

-Consulting Exhibit B-14, the opportunity cost of increasing production of capital from 2to 3 units is

The rule guiding international specialization of production is that a country should specialize in the production of the good

If a resource is underemployed, it

To move along a production possibilities curve from one point to another requires additional resources.

In addition to the items one must give up in order to afford the cost of cigarettes, the opportunity cost of smoking includes

Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product. -Referring to Exhibit B-1, Canary Island has an absolute advantage in the production of both coconuts and kiwi fruit.

In The Wealth of Nations, Adam Smith described the concept of division of labor and specialization by using an illustration of a visit to a

Which of the following causes the world's production possibilities curve to shift tothe right?

Exhibit B-1 below shows the quantity of thing-a-ma-jigs or truffala fruit that can be produced by each country, if all of its resources are devoted to that product. -Referring to the information in Exhibit B-1, the opportunity cost of one kiwi fruit is

Applying the concept of labor specialization to international trade, if all countries specialize in producing what they do relatively best,

According to the text, Japan lost much of its capital stock during World War II. It subsequently found that its

-Which of the following statements is true of Exhibit B-11?

War can be expected to do all of the following things to an economy except

Which of the following is not an example of a capital good?

When resources are destroyed the production possibilities curve inward to the left.