Exam 2: Choices and Trade-Offs in the Market

Which of the following statements is true?

For each surfboard that Australia produces,it gives up the opportunity to make 25 boomerangs.New Zealand can produce 1 surfboard for every 15 boomerangs it produces.Which of the following is true about the comparative advantage between the two countries?

________ 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.

In a free market there are significant restrictions on how a good or service can be produced or sold.

The slope of a production possibility frontier

Table 2-7 Table 2-7 shows the output per day of two pet groomers,Tammi and Horace.They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-7.What is Horace's opportunity cost of grooming a dog?

You have an absolute advantage whenever you

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

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?

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.an increase in the unemployment rate B.a decrease in a nation's money supply C.a war that kills a significant portion of a nation's population Which of the events listed above could cause a movement from Y to W?

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.Which country has a comparative advantage in the production of cashews?

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

Table 2-7 Table 2-7 shows the output per day of two pet groomers,Tammi and Horace.They can either devote their time to grooming dogs or bathing cats. -Refer to Table 2-7.Which of the following statements is true?

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.If the two countries specialise and trade,who should export motorcycles?

Rayburn Reed is a highly talented photographer.He has chosen to specialise in photography because of all of the following except

Which of the following is a factor of production?

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?

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?

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.Does either China or South Korea have an absolute advantage and if so,in what product?

Table 2-3 Production Choices for Dina's Cafe -Refer to Table 2-3.Assume Dina's Cafe only produces sliders and hot wings.A combination of 80 sliders and 100 hot wings would appear