Exam 2: Economic Models: Trade-Offs and Trade

If farmer Sam MacDonald can produce 200 pounds of cabbages and no potatoes or no cabbages and 100 pounds of potatoes and if he faces a linear production possibility frontier,the opportunity cost of producing an additional pound of potatoes is _____ pound(s)of cabbage.

Which office of the U.S.government is a major employer of economists?

Economists disagree more over normative economics than positive economics.

In the circular-flow diagram,firms buy _____ in the _____ market.

In terms of the production possibility frontier,the inefficient use of available resources is shown by:

Trade can be beneficial to an economy because:

An economy is said to have a comparative advantage if it:

Use the following to answer question: -(Figure: Strawberries and Submarines)Use Figure: Strawberries and Submarines.As the economy moves from point A toward point D,it will find that the opportunity cost of each additional submarine:

Suppose Oklahoma decides to produce only two goods,oil and football helmets.If Oklahoma is producing on its production possibility frontier,as oil production increases,the production of football helmets will:

The models used in economics:

Use the following to answer question: -(Table: Fish and Coconut Production Possibilities)Use Table: Fish and Coconut Production Possibilities.The table shows the maximum number of fish and coconuts that Tom and Hank can produce if they produce only one good.In the absence of trade,Tom produces and consumes 9 fish and 2 coconuts,and Hank produces and consumes 3 fish and 2 coconuts.Now they decide to engage in trade.Which statement is INCORRECT?

Economists who are asked to choose between two government policies may disagree because:

Use the following to answer question: -(Figure: Comparative Advantage)Use Figure: Comparative Advantage.The opportunity cost of producing 1 box of oranges for Westland is _____ box(es)of peaches.

The process observed when an economy's production possibility frontier shifts outward is:

The fact that a society's production possibility frontier is bowed out,or concave to the origin of a graph,demonstrates the law of _____ opportunity cost.

Which statement is TRUE?

Assume that Colombia gives up three motorcycles for each ton of coffee it produces,while Bolivia gives up seven motorcycles for each ton of coffee it produces.Colombia has a comparative advantage in _____ production and should specialize in _____.

If an economy is producing at a point on its production possibilities frontier,it is:

Which statement is FALSE about the circular-flow diagram?

Use the following to answer question: -(Figure: Omar's Production Possibilities)Use Figure: Omar's Production Possibilities.Which point or points represent(s)a feasible combination of coconuts and fish?