Chapter 2 Micro econ

Which of the following is not a factor of production? the manager of the local tire shop $1,000 in cash a drill press in a machine shop an acre of farmland

$1,000 in cash

Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla 1.adopted a negative technological change because it chose high-skilled workers over low-paid workers. 2.eroded some of its competitiveness in the luxury electric car market because of its increased cost of production. 3.faced no trade-offs because employing more technically-skilled workers increased efficiency. 4. faced a trade-off between higher cost and lower precision.

faced a trade-off between higher cost and lower precision.

In the circular flow model, producers sell goods and services in the input market. hire resources sold by households in the factor market. spend earnings from resource sales on goods and services in the product market. and households spend earnings from resource sales on goods and services in the factor market.

hire resources sold by households in the factor market

Without an increase in the supplies of factors of production, how can a nation achieve economic growth? by producing more high-value goods and less of low-value goods by lowering the prices of factors of production by increasing the prices of factors of production through technological advancement which enables more output with the same quantity of resources

through technological advancement which enables more output with the same quantity of resources

The points outside the production possibilities frontier are unattainable inefficient efficient attainable

unattainable

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties? 15 bow ties 20 bow ties 35 bow ties 2 bow ties

15 bow ties

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? Italy has the comparative advantage in cheese. France has the comparative advantage in wine. France has the comparative advantage in wine and cheese. Italy has the comparative advantage in wine.

Italy has the comparative advantage in wine.

All of the following countries come close to the free market benchmark except Canada. North Korea. Singapore. Germany.

North Korea.

If opportunity costs are constant, the production possibilities frontier would be graphed as a negatively sloped straight line. a ray from the origin. a positively sloped straight line. a negatively sloped curve bowed in toward the origin.

a negatively sloped straight line.

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by Adam Smith. John Maynard Keynes. Alfred Marshall. Karl Marx.

adam smith

Comparative advantage means the ability to produce a good or service at a lower selling price than any other producer. at a lower opportunity cost than any other producer. of a higher quality than any other producer. at a higher profit level than any other producer.

at a lower opportunity cost than any other producer.

Increasing opportunity cost is represented by a ________ production possibilities frontier. vertical linear bowed out bowed in

bowed out

The production possibilities frontier model shows that 1. if consumers decide to buy more of a product its price will increase. 2. if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. 3. economic growth can only be achieved by free market economies. 4. a market economy is more efficient in producing goods and services than is a centrally planned economy.

if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

The resource income earned by those who supply ________ is called wages. entrepreneurship labor natural resources capital

labor

The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources. maximum attainable equitable minimum attainable only

maximum attainable