Exam 2: Trade-Offs, Comparative Advantage, and the Market System

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.If the two countries specialize and trade, who should export motorcycles?

The ________ demonstrates the roles played by households and firms in the market system.

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.Ireland has a comparative advantage in the production of

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.Does either Ireland or Scotland have an absolute advantage and if so, in what product?

For each surfboard that Australia produces, it gives up the opportunity to make 25 boomerangs.New Zealand can produce 1 surfboard for every 15 boomerangs it produces.Which of the following is true about the comparative advantage between the two countries?

Entrepreneurs bring together the factors of production to produce goods and services.

Suppose your expenses for this term are as follows: tuition: $10,000, room and board: $6,000, books and other educational supplies: $1,000.Further, during the term, you can only work part-time and earn $8,000 instead of your full-time salary of $20,000.What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

If society decides it wants more of one good and all resources are fully utilized, then

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?

The principle of opportunity cost is that

All of the following are examples of spending on goods and services in the circular flow model except

An increase in the labor force shifts the production possibilities frontier inwards over time.

Adam Smith's behavioral assumption about humans was that people

Increasing opportunity cost is represented by a ________ production possibilities frontier.

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.If the two countries specialize and trade, who should export guitars?

What is the difference between product markets and factor markets?

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.What is Ireland's opportunity cost of producing one motorcycle?

All of the following are examples of spending on factors of production in the circular flow model except

Each person goes about her daily business seeking to maximize her own self interests.In doing so, she contributes to the welfare of society at large.This is the idea underlying Adam Smith's "invisible hand."

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-8.South Korea has a comparative advantage in the production of