Exam 2: The Production Possibility Model, Trade, and Globalization

The Apple Watch was designed by Apple in the United States, manufactured in factories in Asia, and sold throughout the world. Many other firms, both American and foreign, began to try to develop alternatives to the Apple Watch. The Apple Watch is an example of American comparative advantage in:

With the resources available, you can make the combinations of Ums and Umies (trinkets from a place called Bandarban) shown in the table. The opportunity cost of producing 60 Umies instead of 30 Umies is: Number of Ums Number of Umies 60 0 40 30 20 60 0 90

The slope of a line that is vertical is:

Two countries that specialize their production along the lines of comparative advantage and then trade with each other will be able to:

The morel is a prized mushroom that is often abundant in the Western United States in years after forest fires. Suppose two companies are buying morels from workers willing to find them. One company offers to pay workers $5.00 per pound, and the other company will pay workers only $4.00 per pound. Economists would say that:

Refer to the graph below. Which of the shifts explains what will happen to the production possibility curve if political unrest and strikes disrupt all sectors of an economy equally?

Refer to the graph below. Point A represents a price of:

Which of the following is the best example of an economic precept?

The production possibility table below is for growing broccoli and asparagus in a 320-square-foot garden in one season. Praduction Passibility Broccoli Asparagus 30 0 20 18 10 26 0 30 Which curve on the graph on the right corresponds to this table?

The production possibility curves of two countries are given below: Refer to the production possibility curves of the two countries. If they specialized and traded, which of the following is the largest bundle each country could have?

The slope of a line is zero when it is:

The principle of increasing marginal opportunity costs states that the initial opportunity costs are:

The law of one price means that prices eventually will be the same in all countries and eventually countries will not have a reason to trade.

Adam Smith argued that greater specialization and division of labor are likely to:

What is 25 percent of 200?

Two nations with differing comparative advantages will be able to consume more if they specialize and trade with each other than if they did not specialize or trade with each other.

Refer to the graph below. Given the production possibility curve, which point is unattainable?

Refer to the graph shown. Destruction of some of the resources necessary to produce both guns and butter would result in what movement?

Consider the following information, which provides percentage change in GDP per year: Per centuge increase in GDP 2012 -10.0 2013 -5.0 2014 -5.0 2015 4.0 2016 10.0

Production possibility curves are upward-sloping because increased production of one good implies reduced production of another good.