Exam 2: Choices and Trade Offs in the Market

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 necklace?

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 events: A.a decrease in the unemployment rate B.an increase in a nation's money supply C.an influx of immigrant workers Which of the events listed above could cause a movement from X to Z?

Jane can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?

Figure 2.6 Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2.6. Suppose Vidalia is currently producing 120 dozen roses per period. How many orchids is it also producing, assuming that resources are fully utilised?

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

'Decreasing opportunity cost' is represented by a ________ production possibility frontier.

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. China has a comparative advantage in the production of:

When you purchase a new set of spurs, you do so in the:

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 Barney's opportunity cost of making a pogo stick?

The natural resources used in production are made available in the:

The points outside the production possibility frontier are:

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 one digital camera?

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. Which country has a comparative advantage in the production of cotton?

'Comparative advantage' means the ability to produce a good or service:

Figure 2.6 Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2.6. What is the opportunity cost of 100 dozen roses?

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. If the two countries specialise and trade, who should export motorcycles?

Which of the following statements about an entrepreneur is false?

What is a 'production possibility frontier'? What do points along the frontier represent? What do points inside and outside the frontier represent? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Without an increase in the supplies of factors of production, how can a nation achieve economic growth?

A major factor contributing to the slow growth rate of less developed economies is: