Exam 2: Choices and Trade - Offs in the Market

Which of the following statements is true?

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

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. Billie faces ________ opportunity costs in the production of pillows and blankets.

An outward shift of a nation's production possibility frontier represents

-Refer to Table 2-4. What is Serena's opportunity cost of making a bracelet?

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

-Refer to Table 2-4. What is Haley's opportunity cost of making a necklace?

-Refer to Table 2-5. What is Fred's opportunity cost of making a unicycle?

-Refer to Table 2-3. Assume Dina's Cafe only produces sliders and hot wings. A combination of 80 sliders and 50 hot wings would appear

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

The opportunity cost of going to an outdoor music festival is

-Refer to Table 2-6. South Korea has a comparative advantage in the production of

-Refer to Figure 2-7. What is the opportunity cost of producing 1 pound of cashews in Indonesia?

On a diagram of a production possibility frontier, opportunity cost is represented by the production possibility frontier shifting outward.

In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

-Refer to Table 2-4. Which of the following statements is true?

-Refer to Table 2-10. This table shows the number of labour hours required to produce a digital cameras and a bushel of wheat in China and South Korea. a. Which country has an absolute advantage in the production of digital cameras? b. Which country has an absolute advantage in the production of wheat? c. What is China's opportunity cost of producing one digital camera? d. What is South Korea's opportunity cost of producing one digital camera? e. What is China's opportunity cost of producing one pound of wheat? f. What is South Korea's opportunity cost of producing one pound of what? g. If each country specialises in the production of the product in which it has a comparative advantage, who should produce digital cameras? h. If each country specialises in the production of the product in which it has a comparative advantage, who should produce wheat?

-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

-Refer to Table 2-6. If the two countries specialise and trade, who should export wheat?

-Refer to Table 2-8. What is Ireland's opportunity cost of producing one guitar?