Chapter 2 Homework

In general, individuals and nations should specialize in producing those goods for which they have a(n):

comparative advantage

Refer to the accompanying figure. If this restaurant makes 75 salads in one hour, then what's the maximum number of pizzas it can make in that same hour?

30

Refer to the accompanying figure. For Pat, the opportunity cost of removing one bag of trash is planting:

5 bulbs

If Al has an absolute advantage over Beth in preparing meals, then:

Al can prepare more meals in a given time period than Beth

Suppose that Nepal invests less in new factories and equipment than does the United States. This will likely cause:

The U.S.'s production possibilities curve to shift outward faster than Nepal's.

If country A can produce more of practically everything than can country B, then which of the following statements is true?

Trade can benefit both countries.

Of the labeled points, only ______ are efficient.

W,X,Y,Z, and V

An individual has an absolute advantage in producing pizzas if that individual:

can produce more pizzas in a given amount of time than anyone else

Refer to the accompanying figure. At point D, the opportunity cost of making milk is:

high because productive resources that are better-suited to making movies are being used to make milk.

The fundamental reason firms outsource is that:

hiring low-wage workers overseas reduces firms' costs.

According to the accompanying table, Martha has the absolute advantage in making:

neither pies nor cakes

According to the textbook, the evidence indicates that NAFTA has:

not significantly reduced the employment of unskilled workers in the United States.

If a given production combination is efficient, then it must be:

on the production possibilities curve.

Outsourcing is a term increasingly used to refer to the act of:

replacing relatively expensive American workers with low-wage workers overseas.

All else equal, the jobs that are the least likely to be outsourced are those that:

require face-to-face communication.

When a nation reduces the barriers to international trade:

the total value of all goods and serviced produced by the nation rises.

One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:

unskilled workers in the United States to lose their jobs.

The Principle of Increasing Opportunity Costs states that

when increasing production, resources with the lowest opportunity costs should be used first.

If you have a comparative advantage in a particular task, then:

you can give up less to accomplish that task than others do

If a nation has the lowest opportunity cost of producing a good, that nation has a(n) ______ in the production of that good.

comparative advantage