Chapter 2

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If the economy is currently producing at point C​, what is the opportunity cost of moving to point B​?

20 thousand spoons

For each watch that Switzerland​ produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two​ countries?

Switzerland has the comparative advantage in watches.

The table above shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. If the two countries specialize and​ trade, who should export​ lumber?

Estonia

If a vineyard wants to raise funds to purchase a new bottling​ machine, it does so in the ______ market.

Factor market

An increase in population shifts the production possibilities frontier inwards over time. T/F

False

If Blake can pick more cherries in one hour than​ Cody, then Blake has a comparative advantage in cherry picking. T/F

False

When a celebrity has the desire to have his image protected following his​ death, this is best described as an example of the protection of....

Intellectual Property

Suppose there is some unemployment in the economy and society decides that it wants more of one good. Which of the following statements is​ true?

It will have to give up production and consumption of some other good.

Which two arrows in the diagram depict the following​ transaction: Lizzie Haxem hires​ "The Paint​ Pros," a professional painting​ company, to paint her home.

K and G

The table above shows the output per week of two​ people, James and Lucy. They can either devote their time to making wagons or making tricycles. Which of the following statements is ​true?

Lucy has a comparative advantage in making wagons and James in making tricycles.

The table above shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. Estonia has a comparative advantage in the production of...

Lumber

The table above shows the output per week of two​ people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. Which of the following statements is ​true?

Mickey has a comparative advantage in making hats and Minnie in making umbrellas.

If the two countries have the same amount of resources and the same technological​ knowledge, which country has an absolute advantage in the production of both pineapples and​ coconuts?

Neither country

The slope of a production possibilities frontier measures the​ ________ of producing one more unit of a good.

Opportunity Cost

​________ is​ (are) technically efficient.

Point B

The table above shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. Japan has a comparative advantage in the production of

Rice

All of the following are considered intellectual property except...

Shares of stock

For each watch that Switzerland​ produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two​ countries?

Switzerland has the comparative advantage in watches.

If the two countries specialize and​ trade, who should export​ wristwatches?

Thailand

Which of the following is an example of spending on factors of production in the circular flow​ model?

The​ "Lucky Ducky" casino buys a new craps table for the casino floor.

A decrease in the unemployment rate may be represented as a movement from a point inside the production possibilities frontier to a point on the frontier. T/F

True

If a country is producing efficiently and is on the production possibilities​ frontier, producing more of one good would result in a movement along the frontier. (T/F)

True

If a country produces only two​ goods, it is possible to have an absolute advantage in the production of both goods. T/F

True

The payment received by suppliers of entrepreneurial skills is called profit. T/F

True

The figure to the right shows various points on three different production possibilities frontiers for a nation. Consider the following​ events: a. a reduction in the patent protection period to no more than 2 years b. a war that destroys a substantial portion of a​ nation's capital stock c. the lack of secure and enforceable property rights system Which of the events listed above could cause a movement from W to V​?

a and c only

Which of the following would shift a​ nation's production possibilities frontier​ inward?

a law requiring workers to retire at age 50

The figure to the right shows various points on three different production possibilities frontiers for a nation. Consider the following​ events: a. a decrease in the unemployment rate b. general technological advancement c. an increase in consumer wealth Which of the events listed above could cause a movement from V to X​ ?

a only

An outward shift of a​ nation's production possibilities frontier can occur due to...

an increase in the labor force.

A guild is...

an organization of producers that limits the amount of a good produced.

The production possibilities frontier model assumes all of the following except...

any level of the two products that the economy produces is currently possible.

Households purchase...

final goods and services in the product market.

Firms sell...

goods in the product market

Assume​ Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would appear...

inside​ Dina's production possibilities frontier.

Assume that in response to changing consumer​ demands, Apple cuts back on the production of self−driving automobiles and increases its production of traditional automobiles. This strategy is best represented by the..

movement from J to H in Graph B.

An inward shift of the production possibilities frontier represents...

negative economic growth.

Suppose your expenses for this term are as​ follows: tuition:​ $9,000, room and​ board: $1,500, books and other educational​ supplies: $1,000.​ Further, during the​ term, you can only work part−time and earn​ $3,000 instead of your full−time salary of​ $8,000. What is the opportunity cost of going to college this​ term, assuming that your room and board expenses would be the same even if you did not go to​ college?

$15000

If the economy is currently producing at point D​, what is the opportunity cost of moving to point B​?

0 Forks

What is​ Finland's opportunity cost of producing one board foot of​ lumber?

0.25 Cell phones

What is​ Wilma's opportunity cost of making a​ statue?

1/3 of a bench

The table above shows the output per week of two​ people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. What is​ Mickey's opportunity cost of making an​ umbrella?

10 Hats

Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes. If he now produces 30 bird houses and 15 wind​ chimes, what is the opportunity cost of producing an additional 10 wind​ chimes?

15 Bird houses

Consider the following​ movements: a. from point V to point W b. from point W to point Y c. from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic​ production?

C. only

Once the copyright on a book​ expires...

no publisher can claim copyright of that​ author's words, but the book can be reissued by any publisher.

What is​ Jack's opportunity cost of cultivating a​ garden?

one and a half lawns mowed

Increasing marginal opportunity cost implies that...

the more resources already devoted to any​ activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

The unattainable points in a production possibilities diagram are...

the points outside the production possibilities frontier.

The table above shows the output per week of two​ people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas. What is​ Mickey's opportunity cost of making a​ hat?

​1/10 of an umbrella

The figure above shows the production possibilities frontiers for Greenland and Iceland. Each country produces two​ goods, snow cones and popsicles. What is the opportunity cost of producing 1 snow cone in​ Greenland?

​5/6 of a popsicle

The figure above shows the production possibilities frontiers for Greenland and Iceland. Each country produces two​ goods, snow cones and popsicles. What is the opportunity cost of producing 1 snow cone in​ Greenland?

​5/6 of a popsicle

Wagons Tricycles James 16 32 Lucy 18 24 What is​ James's opportunity cost of making a​ wagon?

2 tricycles

The figure to the right shows the production possibilities frontier for​ Vidalia, a nation that produces two​ goods, roses and orchids. What is the opportunity cost of ONE dozen​ orchids?

2.5 dozen roses

The table above shows the output per week of two​ people, James and Lucy. They can either devote their time to making wagons or making tricycles. What is​ Lucy's opportunity cost of making a​ tricycle?

3/4 of a wagon

In the circular flow​ diagram, who are economic agents A and who are economic agents B​?

A​ = households; B ​= firms

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.

Which of the following is an example of spending on goods and services in the circular flow​ model?

Chester buys a first−class ticket from Atlanta to London for his long−awaited vacation.

If opportunity costs are​ ________, the production possibilities frontier would be graphed as a negatively sloped straight line.

Constant

Which of the following countries does not come close to the free market​ benchmark?

Cuba

For a person to have a comparative advantage in producing a​ product, he must be able to produce that product at a higher opportunity cost than his competitors. T/F

False

If a country is producing efficiently and is on the production possibilities​ frontier, the only way to produce more of one good is with an advance in technology. T/F

False

In the circular flow​ model, households demand resources such as labor services in the product market. T/F

False

In the circular flow​ model, households supply resources such as labor services in the product market. T/F

False

In​ economics, the term​ "free market" refers to a market where no sales tax is imposed on products sold.

False

The idea underlying Adam​ Smith's "invisible​ hand" is that people tend to behave in ways that go unnoticed in society. T/F

False

The table above shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. Does either Estonia or Finland have an absolute advantage and if​ so, in what​ product?

Finland has an absolute advantage in both products.

The table above shows the output per day of two​ gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Which of the following statements is ​true?

George has an absolute advantage in both tasks.

Carlos Vanya grows tomatoes and strawberries on his land. A portion of his land is more suitable for growing tomatoes and the other portion is better suited for strawberry cultivation. Which of the graphs in the figure above represent his production possibilities​ frontier?

Graph C

The figure above shows the production possibilities frontiers for Greenland and Iceland. Each country produces two​ goods, snow cones and popsicles. Which country has a comparative advantage in the production of​ popsicles?

Greenland

The figure above shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two​ goods, pineapples and coconuts. Which country has a comparative advantage in the production of​ coconuts?

Guatemala

The figure above shows the production possibilities frontiers for Greenland and Iceland. Each country produces two​ goods, snow cones and popsicles. Which country has a comparative advantage in the production of snow​ cones?

Iceland

If the 12 nations that are a part of the TPP do not agree to these stricter pharmaceutical patent laws as a way to increase intellectual property rights and ignore any international agreements which do protect these intellectual property​ rights, which of the following would most likely​ occur?

Pharmaceutical companies would decrease investment in the development of more experimental drugs.

The figure to the right shows various points on three different production possibilities frontiers for a nation. Consider the following​ events: a. an increase in the patent protection period to 75 years b. a hurricane that destroys a substantial portion of a​ nation's capital stock c. the implementation of a secure and enforceable property rights system Which of the events listed above could cause a movement from W to Z​?

a and c only

The figure to the right shows various points on three different production possibilities frontiers for a nation. Consider the following​ events: a. an increase in the unemployment rate b. general technological advancement c. an increase in consumer wealth Which of the events listed above could cause a movement from Z to V​ ?

a only

The​ ________ production points on a production possibilities frontier are the points along and inside the production possibilities frontier.

attainable

The figure to the right shows various points on three different production possibilities frontiers for a nation. Consider the following​ movements: a. from point V to point W b. from point W to point Y c. from point Y to point Z Which of the movements listed above represents advancements in technology with respect to both plastic production and food​ production?

b only

A production possibilities frontier with a​ ________ shape indicates increasing opportunity costs as more and more of one good is produced.

bowed outward

The figure to the right shows various points on three different production possibilities frontiers for a nation. 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 Z to X​ ?

c only

Assume​ Nadia's Neckties only produces ascots and bowties. Nadia faces​ ________ opportunity costs in the production of ascots and bowties.

constant

Which of the following statements about an entrepreneur is​ true?

develops the vision for the firm and funds the producing unit

The opportunity cost of taking an online history class is

equal to the highest value of an alternative use of the time and money spent on the class.

Izzy Amador is a highly talented tattoo artist. She has chosen to specialize in tattoo art because of all of the following except ...

her opportunity cost of pursuing another career is very low.

If the production possibilities frontier is​ linear, then ...

opportunity costs are constant as more of one good is produced.

In a production possibilities frontier​ model, a point inside the frontier is...

productively inefficient.

Households...

purchase final goods and services in the product market.

A critical function of the government in facilitating the operation of a market economy is...

setting up and enforcing private property rights.

Economic growth is represented on a production possibilities frontier model by the production possibilities frontier....

shifting outward.

If the best lawyer in town is also the best at operating a word​ processor, then according to economic​ reasoning, this person should...

specialize in being a lawyer because its opportunity cost is lower.

In the circular flow​ model, households...

spend earnings from resource sales on goods and services in the product market.

Comparative advantage means..

the ability to produce a good or service at a lower opportunity cost than any other producer.

Which of the following is not a flow in the circular flow​ model?

the flow of profit and the flow of revenue


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