Exam 2: Choices and Trade-Offs in the Market

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.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Economic decline (negative growth)is represented on a production possibility frontier model by the production possibility frontier________.

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point C, what is the opportunity cost of moving to point B?

What is a major factor contributing to the slow growth rate of less developed economies?

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

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:

Any output combination along a production possibility frontier is associated with fully utilised resources.

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.A combination of 9 pillows and 14 blankets would appear________.

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 reduction in the patent protection period to no more than 2 years b.a war that destroys a substantial portion of a nation's capital stock c.the lack of a secure and enforceable property rights system Which of the events listed above could cause a movement from W to V?

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

If additional units of a good could be produced at a constant opportunity cost, the production possibility frontier would be bowed outward (concave).

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

What is comparative advantage? What is absolute advantage? __________________________________________________________________________________________________________________________________________________________________________________________

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.Which of the following statements is true?

An increase in the labour force shifts the production possibility frontier inwards over time.

Which of the following is not a critical function of the government in facilitating the operation of a market economy?

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

Because the copyright on the L.Frank Baum book The Wonderful Wizard of Oz expired many years ago, the actual written words from the book are in the public domain.Publishers who now choose to sell their own versions of the book________.

If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point E, what is the opportunity cost of moving to point B?