Exam 2: Choices and Trade-Offs in the Market

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

Each person goes about her daily business seeking to maximise 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.'

The ability of an economy to increase the production of goods and services is:

The basis for trade is comparative advantage, not absolute advantage.

Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2.3.A movement from X to Y:

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

The production possibility frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources and current technology.

Consider the following items: a.the novel The DaVinci Code by Dan Brown b.the 'The Spirited Shipper,' an innovative wine shipping box c.a Swiss chef's award-winning recipe d.an original fabric design, for example, the fabric used for 'Coach' bags and luggage Which of the items listed is an example of intellectual property?

Specialising in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except:

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.

Comparative advantage means the ability to produce a good or service________.