Exam 2: Choices and Trade - Offs in the Market

All of the following countries come close to the free market benchmark except

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 production possibility frontier model assumes which of the following?

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

Adam Smith's behavioural assumption about humans was that people

-Refer to Figure 2-2. Steve Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in Figure 2-2 represents his production possibility frontier?

-Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear

The resource income earned by those who supply ________ is called wages.

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

________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

Jane can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?

-Refer to Figure 2-3. Consider the following events: a. an increase in the unemployment rate B. general technological advancement C. a decrease in consumer wealth Which of the events listed above could cause a movement from X to V?

If additional units of a good could be produced at an increasing opportunity cost, the production possibility frontier would be linear.

-Refer to Figure 2-3. Consider the following events: a. an increase in the patent protection period to 30 years B. an increase of a nation's capital stock C. an improved property rights system Which of the events listed above could cause a movement from V to W?

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, what is the opportunity cost of producing an additional 10 silk roses?

-Refer to Figure 2-3. Consider the following events: a. a decrease in the unemployment rate B. general technological advancement C. an increase in consumer wealth Which of the events listed above could cause a movement from V to W?

-Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 30 calzones would appear

-Refer to Table 2-5. Which of the following statements is true?

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

-Refer to Table 2-8. Does either Ireland or Scotland have an absolute advantage and if so, in what product?