Exam 2: Economic Models: Trade-Offs and Trade

An inward shift in the U.S.economy's production possibility frontier could represent:

Economists generally believe that a country should specialize in the production of a good or service if the:

The effect of a natural disaster can be shown by a(n)_____ the production possibility frontier.

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.If the economy is operating at point Y and its relevant production possibility frontier is curve 1:

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

Use the following to answer question: -(Figure: Guns and Butter)Use Figure: Guns and Butter.If the economy is operating at point B,producing 16 guns and 12 pounds of butter per period,a decision to move to point E and produce 18 pounds of butter:

The simplest circular-flow model shows the interaction between households and firms.In this model:

Increases in resources or improvements in technology will tend to cause a society's production possibility frontier to:

Use the following to answer question: -(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Suppose the economy is operating at point B.Achieving production at point F would require that the economy:

In Kessy's old kitchen,he could bake 10 cookies or mix 15 glasses of lemonade in one day.Now Kessy has a larger oven and refrigerator.How does this affect his production possibility frontier?

Use the following to answer question: -(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown decides to devote half of its labor time to the production of socks and half of the time to the production of shirts,it can produce _____ shirts and _____ pairs of socks.

The production possibility frontier is bowed out because:

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

In one day,Kessy can bake 10 cookies or mix 15 glasses of lemonade.His friend Ava can make 10 cookies or 10 glasses of lemonade.His other friend,Ian,can make 10 cookies or 20 glasses of lemonade.Who has the LOWEST opportunity cost in cookie production?

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

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

If Jim buys a lunch at a restaurant,he has bought a factor of production in the factor market.

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates:

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 or coconuts that Tom and Hank can produce when each produces only one of the goods.The table implies that Hank has an absolute advantage in the production of both goods.

The _____ illustrates the trade-offs facing an economy that produces only two goods.