Exam 2: The Economic Problem

Suppose that when NBC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies. ________ advantage in making pizzas.

Abe can catch 10 pounds of fish an hour or pick 10 pounds of fruit. Zeb can catch 30 pounds of fish an hour or pick 20 pounds of fruit. The opportunity cost of fish is ________ for Abe than for Zeb, and the opportunity cost of fruit is ________ for Abe than for Zeb.

-The above table shows the tons of steel and concrete that can be produced by the United States and France in an hour. From the data in the table,

"The United States is more productive in most activities than are most of other countries because it has an absolute advantage in the production of most goods and services. Therefore we should restrict international trade as it only benefits other countries at the expense of the United States." Comment on this statement.

The marginal benefit of a good or service

-Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

-In the above figure, once on PPF₂, a country would grow slowest by producing at point

-In the figure above, Jill is producing at point A. Jill's opportunity cost producing one pair of pants is

If an economy is operating at a point inside the production possibilities frontier, then

To obtain the gains available from comparative advantage, individuals or countries must do more than specialize; they must also

If the marginal benefit of consuming another unit of a good is positive, then to reach the allocatively efficient level of output more of the good should be produced and consumed

-The figure above illustrates that if this country wishes to have F₂ - F₁ additional food by moving from point A to point B, it will

-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda

Over the past several decades, the United States has devoted a greater fraction of its resources to consumption than Hong Kong, which is why the U.S. economy grew faster than Hong Kong's economy.

A PPF bows outward because

The production possibilities frontier itself illustrates

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. Germany wishes to purchase computers from the United States in exchange for cameras. What is the maximum number of cameras per computer that Germany would be willing to pay the United States?

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is