Exam 2: Economic Models: Trade-Offs and Trade

Use the following to answer question: -(Figure: Bicycles and Radishes I)Use Figure: Bicycles and Radishes I.The figure shows the 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.The opportunity cost of producing an additional ton of radishes would be greater in:

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 Tom has a comparative advantage in the production of both goods.

Economists usually assume that production is subject to increasing opportunity costs because:

Because of trade,a country may:

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

Use the following to answer question: -(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Point F is:

Which of the following is sold in the factor market?

Use the following to answer question: -(Figure: Wine and Wheat)Use Figure: Wine and Wheat.If this economy is producing at point A,we know the economy is:

As long as people have different _____,everyone has a comparative advantage in something.

An economic model is a simplified version of reality that is used to analyze real-world economic situations.

The financial meltdown of 2008-2009:

Use the following to answer question: -(Figure: Production Possibility Frontier for Tealand)Use Figure: Production Possibility Frontier for Tealand.If Tealand is producing 10 million scones and 10 million cups of tea (point A),we know that the economy:

In movement along a production possibility frontier,the opportunity cost to society of getting more of one good:

In the factor market,firms buy goods and services.

Jim is being paid $7.25 an hour to work at a restaurant.In the circular flow,this is an example of a:

If they spend all night writing computer programs,Laurence can write 10 programs,and Carrie Anne can write 5.If they spend all night making sunglasses,Laurence can make 6 pairs,and Carrie Anne can make 4.We know that _____ has a comparative advantage in _____.

If the production possibility frontier is a straight line:

In the circular-flow diagram,an individual or a group of people (usually a family)who share their income is a(n):

If the opportunity cost of manufacturing machinery is lower in the United States than in Britain and the opportunity cost of manufacturing sweaters is higher in the United States than in Britain,then the United States will:

All points on the production possibility frontier are: