Exam 2: Choices and Trade-Offs in the Market

The points outside the production possibility frontier are

Which of the following statements about an entrepreneur is false?

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.What is Scotland's opportunity cost of producing one guitar?

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.general technological advancement C.a decrease in consumer wealth Which of the events listed above could cause a movement from X to V?

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.What is South Korea's opportunity cost of producing one digital camera?

a.Draw a production possibility frontier for a country that produces two goods,beer and pretzels.Assume that resources are equally suited to both tasks. b.Define opportunity costs. c.Use your production possibility frontier graph to demonstrate the principle of opportunity costs.

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

Stricter laws and regulations to protect intellectual property rights

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 24 pizzas and 30 calzones would appear

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 Tammi's opportunity cost of grooming a dog?

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 guitars?

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

Figure 2-2 -Refer to Figure 2-2.Steve Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle,and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-2 represents his production possibility frontier?

Figure 2-3 Figure 2-3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2-3.A movement from Y to Z

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

Table 2-9 -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?

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 50 hot wings would appear

The attainable production points on a production possibility curve are

Figure 2-6 Figure 2-6 above shows the production possibility frontier for Vidalia,a nation that produces two goods,roses and orchids. -Refer to Figure 2-6.What is the opportunity cost of 100 dozen roses?