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Exam 2: Trade-Offs, comparative Advantage, and the Market System

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Question 31

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Figure 2-19 -Refer to Figure 2-19.Which two arrows in the diagram depict the following transaction: Carter earns a $400 commission for selling men's designer shoes at Brooks Brothers.

A) J and M
B) K and G
C) K and M
D) J and G

E) A) and D)
F) A) and C)

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Question 32

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Table 2-12 $\begin{array} { | l | c | c | } \hline & \text { One canoe } & \text { One Sailboat } \\\hline \text { Guaternala } & 10 \text { hours } & 60 \text { hours } \\\hline \text { Monduras } & 15 \text { hours } & 75 \text { hours } \\\hline\end{array}$ Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12.Guatemala has a comparative advantage in the production of

A) canoes.
B) sailboats.
C) both products.
D) neither product.

E) B) and D)
F) A) and B)

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Question 33

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

Table 2-3 Production Choices for Dina's Diner $\begin{array} { | c | c | c | } \hline \text { Choice } & \begin{array} { l } \text { Quantity of } \\\text { Sliders } \\\text { Produced }\end{array} & \begin{array} { l } \text { Quantity of } \\\text { Hot Wings } \\\text { Produced }\end{array} \\\hline \text { A } & 160 & 0 \\\hline \text { B } & 120 & 50 \\\hline \text { C } & 80 & 100 \\\hline \text { D } & 40 & 150 \\\hline \text { E } & 0 & 200 \\\hline\end{array}$ -Refer to Table 2-3.Assume Dina's Diner only produces sliders and hot wings.A combination of 120 sliders and 100 hot wings would appear

Table 2-12 $\begin{array} { | l | c | c | } \hline & \text { One canoe } & \text { One Sailboat } \\\hline \text { Guaternala } & 10 \text { hours } & 60 \text { hours } \\\hline \text { Monduras } & 15 \text { hours } & 75 \text { hours } \\\hline\end{array}$ Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-12.What is Guatemala's opportunity cost of producing one canoe?

A worker is hired in a

Increasing marginal opportunity cost implies that

Figure 2-15 Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. -Refer to Figure 2-15.Which country has a comparative advantage in the production of snow cones?

Which of the following is not a factor of production?

Figure 2-15 Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. -Refer to Figure 2-15.Which country has a comparative advantage in the production of popsicles?

Table 2-14 $\begin{array} { | l | c | c | } \hline & \text { One Motorcycle } & \text { One Guitar } \\\hline \text { Ireland } & 20 \text { hours } & 4 \text { hours } \\\hline \text { Scotland } & 8 \text { hours } & 2 \text { hours } \\\hline\end{array}$ Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14.If the two countries specialize and trade,who should export guitars?

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

Which of the following is a factor of production?

Figure 2-6 -Refer to Figure 2-6.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

The unattainable points in a production possibilities diagram are

If additional units of a good are produced at an increasing opportunity cost,the production possibility frontier would be bowed outward (concave).

Which of the following are separate flows in the circular flow model?

Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. -Refer to Figure 2-4.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?

The payment received by suppliers of entrepreneurial skills is called interest.

Figure 2-1 -Refer to Figure 2-1.________ is (are) unattainable with current resources.