Exam 2: Economic Models: Trade-Offs and Trade

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

Economic models that make unrealistic assumptions may be useful in analyzing some economic problems.

In the circular-flow diagram,the flow of money going into each sector or market is _____ the flow of money coming out of that market or sector.

Before 2000,the mortgage-backed securities market was relatively small because:

Which statement is positive? Which statement is normative? I.The federal minimum wage in 2016 was $7.25 an hour. II.The minimum wage should be high enough that families will not live in poverty.

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 there is a significant increase in the amount of human capital flowing to both coconut producers and fish producers.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:

Use the following to answer question: -(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.What is the maximum number of pairs of socks Largetown can produce?

Mary spends $5 on food for her cat.This is an example of a:

In the product market,households buy goods and services.

The production possibility frontier will NOT shift outward due to an:

The basis of the circular-flow diagram is that the money flowing into each sector or market is equal to the money that flows out.

An economy is said to have a comparative advantage in the production of a good if it can produce that good:

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.What is Mark's opportunity cost to produce one brownie?

The effect of an increase in productive inputs such as labor and capital can be shown by a(n):

Use the following to answer question: -(Figure: Guns and Butter)Use Figure: Guns and Butter.The combination of guns and butter at point H:

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.Technological improvements will likely:

The value of a mortgage-backed security is tied to the interest on the national debt paid by the Federal Reserve.

Which statement is normative?

Use the following to answer question: -(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.The downward slope of the production possibility frontier implies that resources:

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 coffee for Brazil is _____ salmon.