Exam 2: Choices and Trade Offs in the Market

All of the following countries come close to the free market benchmark except:

In a two-good, two-country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

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. What is Fred's opportunity cost of making a unicycle?

The payment received by suppliers of entrepreneurial skills is called 'interest'.

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 guitar?

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 Holly's opportunity cost of making a bracelet?

Table 2.6 Table 2.6 shows the number of labour hours required to produce a digital camera and a kilo of wheat in China and South Korea. -Refer to Table 2.6. What is China's opportunity cost of producing 1 kilogram of wheat?

Figure 2.4 -Refer to Figure 2.4. If the economy is currently producing at point X, what is the opportunity cost of moving to point Y?

What is 'comparative advantage'? What is 'absolute advantage'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The term 'property rights' refers to:

Which of the following is a factor of production?

Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2.3. 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 only plastic production?

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. Billie faces ________ opportunity costs in the production of pillows and blankets.

If a country produces only two goods, then it is not possible to have an absolute advantage in the production of both those goods.

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

Stricter laws and regulations to protect intellectual property rights will:

An increase in the unemployment rate may be represented as a movement from a point on the production possibility frontier to a different point on the frontier.

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?

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. Which of the following statements is true?

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. What is Fred's opportunity cost of making a pogo stick?