KSU Econ 110 HW 2 AL-HAMDI
Published in 1776, ________ was written by Adam Smith.
"An Inquiry into the Nature and Causes of the Wealth of Nations"
Refer to Figure below. What is the opportunity cost of one dozen roses? 2.2
0.4 dozen orchids
Refer to Figure below. If the economy is currently producing at point X, what is the opportunity cost of moving to point W? 2.6 Correct!
3 million tons of steel
2.2 4) Refer to Figure above. If Vidalia chooses to produce 80 dozen roses, how many orchids can it produce to maximize production?
48 dozen orcids
All of the following are examples of spending on goods and services in the circular flow model except
Chaitanya buys a new spa pedicure chair for her expanding nail salon business.
In economics, the term "free market" refers to a market where no sales tax is imposed on products sold.
False.
In the circular flow model, households supply resources such as labor services in the product market.
False.
Minnie Mickey Hats 40 50 Umbrellas 10 5 10) Refer to Table above. Which of the following statements is true?
Mickey has a comparative advantage in making hats and Minnie in making umbrellas
Refer to Figure below. ________ is (are) unattainable with current resources 2.1.
Point c
________ shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.
The production possibilities frontier model
Consider a country that produces only two goods: pineapples and tractors. Suppose it is possible for this country to increase its production of pineapples without producing fewer tractors. In this case, its current output combination is inefficient. Correct!
True
An example of a factor of production is
a worker hired by an auto manufacturer
If you can produce more of something than others with the same resources, you have
an absolute advantage
An outward shift of a nation's production possibilities frontier can occur due to
an increase in the labor force.
Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?
consume a combination of goods that lies outside its own production possibilities frontier
Refer to Figure below. Which country has a comparative advantage in the production of coconuts? 2.9 Correct!
guatemala
2.13 13) Refer to Figure above. In the circular flow diagram, economic agents M represent
households.
The ability to exercise control over one's own resources within the confines of the law refers to
one's property rights.
The circular flow model demonstrates
the roles played by households and firms in the market system.
In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it can still benefit by trading with the other country.
true.
