Exam 2: Choices and Trade-Offs in the Market

What is meant by the term 'free market'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

In economics, the term 'free market' refers to a market where products are traded but not sold.

a.Draw a production possibility frontier for a country that produces two goods, beer and pretzels.Assume that resources are equally suited to both tasks. b.Define opportunity costs. c.Use your production possibility frontier graph to demonstrate the principle of opportunity costs. __________________________________________________________________________________________________________________________________________________________________________________________

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.Which of the following statements is true?

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

What is the opportunity cost of going to an outdoor music festival?

According to the production possibility model, if more resources are allocated to the production of physical and human capital, then which of the following is likely to happen?

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except:

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves.If she now produces 60 silk roses and 80 silk leaves, the opportunity cost of producing an additional 10 silk roses is:

Who wrote An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776?

What is shown by the production possibility frontier model?

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

Which of the following statements about an entrepreneur is false?

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?

Which of the following countries does not come close to the free market benchmark?

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 60 dozen orchids per period.How many roses is it also producing, assuming that resources are fully utilised?

How does Adam Smith's idea of the 'invisible hand' apply to the various parts, made by many different manufacturers in many different countries, that are used by Apple to produce an iPad? _____________________________________________________________________________________________ _____________________________________________________________________________________________

A nation's production possibility frontier would shift outward from________.

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.Ireland has a comparative advantage in the production of: