Exam 2: Economic Models: Trade-Offs and Trade

Use the following to answer question: -(Figure: Comparative Advantage)Use Figure: Comparative Advantage.Westland has an absolute advantage in producing:

A firm is an organization that produces goods and/or services.

A two-dimensional production possibility frontier illustrates the _____ facing an economy that _____ only two goods.

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

Smallville has a linear production possibility frontier in the production of good X and good Y.It can produce 6 of X per hour or 8 of Y per hour.Suppose it has 240 hours of labor and divides labor hours equally between production of good X and good Y.What is the MAXIMUM number of good Y it can produce in the time it has allocated to Y production?

To achieve gains from trade,each nation should specialize in the production of a good or service if:

Use the following to answer question: -(Figure: Wine and Wheat)Use Figure: Wine and Wheat.If this economy is producing at point A and wants to produce at point B,it must:

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 time 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.If a student decides to consume one additional hour of leisure time,how many hours of study time must she give up?

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced,then its production possibility frontier is:

Use the following to answer question: -(Figure: Wine and Wheat)Use Figure: Wine and Wheat.If this economy is producing on the production possibility frontier,what would allow it to produce at point C? ==

The circular-flow diagram represents the market for _____ and the market for _____.

Households buy goods and services in the _____ markets.

The opportunity cost of production:

The U.S.production possibility frontier would _____ if all computers using Microsoft operating systems contracted a virus that corrupted all information on those computers.

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.Finland has a comparative advantage in producing:

A typical bowed-out production possibility frontier between two goods,guns and butter,shows that the opportunity cost of butter in terms of guns increases as more butter is produced.This implies that the opportunity cost of guns in terms of butter decreases as more guns are produced.

Free trade between countries:

Use the following to answer question: -(Figure: Comparative Advantage)Use Figure: Comparative Advantage.Eastland has a comparative advantage in producing:

"Unemployment of 5% is too high" is:

Which statement is positive?