Exam 2: Economic Models: Trade-Offs and Trade

Alison has a linear production possibility frontier in bracelets and necklaces.In one hour,she can produce 5 bracelets or 10 necklaces.What is the opportunity cost to make 1 necklace?

Use the following to answer question: -(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.If the economy is producing 8 cars and 12 computers per period:

"Many economists agree that income taxes should be increased for rich people" is a positive statement.

Use the following to answer question: -(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Assume that the economy is operating at point A.The opportunity cost of moving to point C is equal to _____ million tons of strawberries:

Use the following to answer question: -(Table: Trade-off of Study Time and Leisure Time)Use Table: Trade-off of Study Time and Leisure Time.A student sleeps 8 hours per day and divides the remaining time between study and leisure time.The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day.Suppose this student is studying 4 hours and spending 10 hours doing leisure activities.This point is:

Which statement is normative?

In the circular-flow diagram,a firm is an:

Use the following to answer question: -(Figure: Production Possibilities and Circular-Flow Diagram)Use Figure: Production Possibilities and Circular-Flow Diagram.Assume the two figures represent the same economy.Suppose that in the circular-flow diagram there is a significant decrease in the amount of labor flowing to the firms that produce coconuts.If all other variables remain unchanged,this adjustment in the economy would be BEST represented in the production possibilities figure by a move from point A toward:

Suppose Indiana produces only steel and corn,with fixed amounts of land,labor,and capital resources.Which scenario BEST sets the stage for economic growth?

An apple is a resource sold in the factor market.

In the factor market,households buy goods and services.

Use the following to answer question: -(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Suppose the economy is operating at point A.The first submarine,which is achieved at point B,would have an opportunity cost of _____ million tons of strawberries.

If Mary accepts a job as a nurse,she has sold a factor of production in the factor market.

A normative statement deals with:

Use the following to answer question: -(Table: Production Possibilities Schedule I)Use Table: Production Possibilities Schedule I.If the economy produces 24 units of capital goods per period,it also can produce,at MOST,_____ units of consumer goods per period.

The production possibility frontier will shift outward because of:

Unemployment decreased to its lowest level in 10 years last month.This statement is a(n):

Use the following to answer question: -(Table: Wheat and Aluminum)Use Table: Wheat and Aluminum.The United States and Germany can produce both wheat and aluminum.The table shows the maximum annual output combinations of wheat and aluminum that can be produced.Based on the table:

Economists are generally in support of:

Use the following to answer question: -(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.Largetown CANNOT produce _____ shirts and _____ pairs of socks.