Pre-lecture assignment 2

produce more of a good or service than competitors using the same amount of resources

Absolute advantage is the ability of an individual, firm, or country to:

all trading partners who specialize in goods where they have comparative advantage

According to the theory of comparative advantage, specialization and free trade will benefit:

inventions that make a market work better

Contracts, insurance, patents and accounting rules are:

B, which flows from Firms to Product Markets

In the circular flow diagram, which arrow shows the flow of goods and services?

firms

In the circular flow model of the economy, __________ are the suppliers of goods and services.

Product markets

In the circular flow model, which of the following refers to markets where goods such as computers or services such as medical treatment are offered?

Country B (I don't know why, look up image on google)

In the graphs shown, which country has a comparative advantage in the production of shirts?

an absolute advantage in both jobs

Ms. Boulware is the best lawyer and the best secretary in town. She has:

Moving from point B to point C (I don't know why, look at image on google)

Refer to the graph. Which of the following best represents the situation in which BMW must face a trade-off between producing SUVs and producing hybrids?

a technological advance that affects both the production of automobiles and aircraft carriers

The outward shift of the production possibilities frontier from point A to point B in the above graph would most likely be caused by:

smaller

The principle of increasing marginal opportunity cost states that the more resources devoted to any activity, the _ the payoff to devoting additional resources to that activity.

2 units of food (the box shows 6 for food and 3 for clothing, might have to do with slope?)

Using information in the table, what is country A's opportunity cost of producing 1 unit of clothing?

Centrally planned economy

In what type of economy does the government decide how most economic resources will be allocated?

C (which is the flow from Factor Markets to Firms)

Which letter best represents the demand for factors of production in this circular flow model?

To allow individuals or firms to have exclusive use of their property

Which of the following is critical to the success of the market system?

invisible hand.

Adam Smith observed that people pursuing their own self-interest in a free market will actually result in the best interest of society as if these actions were guided by a(n):

taking risks

The role of the entrepreneur always involves:

overall standards of living increase

When nations specialize in their comparative advantage and engage in trade:

has a lower opportunity cost in the production of that good

If a country has a comparative advantage in the production of a good, then that country:

The division of labor

In his 1776 book, "An Inquiry into the Nature and Causes of the Wealth of Nations," Adam Smith notes that specialization increases productivity. Which of the following was the cause of this phenomenon?

are guaranteed by two amendments to the U.S. Constitution

In the United States, property rights:

Combination G (because it is outside the PPF line)

In the above graph, which of the following combinations is unattainable with the current resources available in this country?

Four cakes and seven pies (I think because this does not fall on the line, it would fall outside of the line)

In the above graph, which of the following combinations of pies and cakes is unattainable given the existing resources?

Protect intellectual property rights

What are copyrights designed to accomplish?

Opportunity cost

What is the name given to the highest-valued alternative that must be given up to engage in any activity?