Exam 2: Choices and Trade - Offs in the Market

A major factor contributing to the slow growth rate of less developed economies is

The points outside the production possibility frontier are

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?

If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has a comparative advantage in shucking oysters.

What is economic growth?

Suppose your expenses for this term are as follows: tuition: $10 000, room and board: $6000, books and other educational supplies: $1000. Further, during the term, you can only work part-time and earn $8000 instead of your full-time salary of $20 000. What is the opportunity cost of going to university this term, assuming that your room and board expenses would be the same even if you did not go to university?

-Refer to Figure 2-6. What is the opportunity cost of 80 dozen orchids?

What is the difference between product markets and factor markets?

-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?

A decrease in the unemployment rate may be represented as a movement from a point on the production possibility frontier to a point outside the frontier.

-Refer to Table 2-3. Assume Dina's Cafe only produces sliders and hot wings. A combination of 120 sliders and 100 hot wings would appear

-Refer to Table 2-7. What is Horace's opportunity cost of grooming a dog?

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

If a brewery wants to raise funds to purchase a new fermenting vat, it does so in the

-Refer to Table 2-9. This table shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland. a. Which country has an absolute advantage in the production of motorcycles? b. Which country has an absolute advantage in the production of guitars? c. What is Ireland's opportunity cost of producing one motorcycle? d. What is Scotland's opportunity cost of producing one motorcycle? e. What is Ireland's opportunity cost of producing one guitar? f. What is Scotland's opportunity cost of producing one guitar? g. If each country specialises in the production of the product in which it has a comparative advantage, who should produce motorcycles? h. If each country specialises in the production of the product in which it has a comparative advantage, who should produce guitars?

-Refer to Table 2-6. What is China's opportunity cost of producing one digital camera?

In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it must also have a comparative advantage in the production of both goods.

For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France can produce 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the comparative advantage between the two countries?

-Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 15 calzones would appear

-Refer to Figure 2-3. A movement from ________ could occur because of an influx of immigrant labour.