Exam 2: Economic Models: Trade-Offs and Trade

Use the following to answer question: -(Table: Coffee and Salmon Production Possibilities)Use Table: Coffee and Salmon Production Possibilities.The table shows the maximum amounts of coffee and salmon that Brazil and Alaska can produce if they just produce one good.The opportunity cost of producing 1 unit of salmon for Alaska is _____ coffee(s).

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

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.Based on this information,_____ has the comparative advantage in making brownies and _____ has the comparative advantage in making cookies.

Economic models often:

Use the following to answer question: -(Figure: Guns and Butter)Use Figure: Guns and Butter.On this figure,points A,B,E,and F:

Use the following to answer question: -(Table: Coffee and Salmon Production Possibilities II)Use Table: Coffee and Salmon Production Possibilities II.This table shows the maximum amounts of coffee and salmon,both measured in pounds,that Brazil and Alaska can produce if they just produce one good.Brazil has an absolute advantage in producing:

Economists use models to explain real-life situations because:

In building models,economists often assume that opportunity costs don't matter.

Which statement is normative?

In the factor market,firms buy resources.

Positive economics:

Use the following to answer question: -(Figure: Strawberries and Submarines)Use Figure: Strawberries and Submarines.Suppose the economy now operates at point C.Moving to point E would require that the economy:

Absolute advantage is the basis for gains from trade.

Labor and capital are the only two factors of production.

In a single day,Sarah can produce 10 hamburgers,and Abe can produce 5 hamburgers.Therefore,_____ has a(n)_____ advantage in making hamburgers.

Economic models are:

Use the following to answer question: -(Figure: Bicycles and Radishes I)Use Figure: Bicycles and Radishes I.The figure shows production possibility frontiers for two countries that produce only radishes and bicycles.The axes of the two graphs are measured in equivalent units.Country A is operating at point M,and country B is operating at point N.Suppose country A discovers a new technology that greatly increases its ability to produce bicycles but has no effect on its ability to produce radishes.This would:

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 most firms undergo a significant increase in productivity.This results in a significant increase in the output of both coconuts and fish.If all other variables remain unchanged,then the adjustment in this economy would be BEST represented in the production possibilities figure by a movement from point A toward:

A simplified representation that is used to study a real situation is called a(n):

Use the following to answer question: -(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.The combination of cars and computers at point H: