Exam 2: Choices and Trade Offs in the Market

Stricter laws and regulations to protect intellectual property rights will:

Any output combination along a production possibility frontier is associated with fully utilised resources.

Table 2.7 Table 2.7 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2.7. What is Horace's opportunity cost of bathing a cat?

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. Which of the following statements is true?

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

Table 2.2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 10 pillows and 14 blankets would appear:

Figure 2.7 Figure 2.7 shows the production possibility frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2.7. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

Table 2.7 Table 2.7 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2.7. What is Tammi's opportunity cost of bathing a cat?

James can produce either a combination of 30 bow ties and 40 neckties or a combination of 40 bow ties and 20 neckties. If he now produces 40 bow ties and 20 neckties, what is the opportunity cost of producing an additional 20 neckties?

The 'production possibility frontier model' assumes which of the following?

For a person to have a comparative advantage in producing a product, she must be able to produce that product at a lower opportunity cost than her competitors.

In a two-good, two-country world, if one country has an absolute advantage in the production of both goods, it must also have a comparative advantage in the production of both goods.

Table 2.8 Table 2.8 shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2.8. What is Scotland's opportunity cost of producing one motorcycle?

Table 2.5 Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. -Refer to Table 2.5. Which of the following statements is true?

What is meant by the term 'opportunity cost'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Table 2.4 Table 2.4 shows the output per week of two jewellers, Sabrina and Holly. They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.4. What is Sabrina's opportunity cost of making a necklace?

A decrease in the unemployment rate may be represented as a movement from a point on the production possibility frontier to a point outside the frontier.

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew is a factor of production.

Which of the following is not a factor of production?

The opportunity cost of going to an outdoor music festival is: