ECON 110 HW 2

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

an example of a factor of production is

a worker hired by an auto manufacturer.

specializing in production of a good or service in which one has a comparative advantage enables a country to do which of the following

consumes a combination of goods that lies outside its own production possibilities frontier

in the circular flow model diagram, economic agent m represents

house holds

Which of the following statements is true

mickey has a comparative advantage making hats and mini has a comparative advantage in making umbrellas

the ability to exercise ones own resources within the confines of law refers to

ones property right

_________ is (are) attainable with current resources

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

production possibilities frontier model

if you can produce more of something than others with the same resources, you have

an absolute advantage

an outward shift of a nations production possibility frontier can occur due

an increase in the labor force

all of the following are examples of spending on goods and services in the circular flow model except

chaitnaya buys a new spa pedicure chair for her expanding nail salon business

the circular flow model demonstrates

the roles played by house holds and firms in the market system

if the economy is currently producing at point x, what is the oppurtunity cost of moving to point w?

3 million tons of steel

if vidalia chooses to produce 80 dozen roses how many orchids can it produce to maximize production

48 dozen orchids

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

Which country has a comparative advantage in the production of coconuts

Guatemala

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.

True

what is the opportunity cost of one dozen roses

.4 roses

Published in 1776, ________ was written by Adam Smith.

An inquiry in the nature and causes of wealth of nations