Exam 2: Economic Models: Trade-Offs and Trade

Consider a production possibility frontier for Italy. If in 2016 Italy's resources are not being fully utilized, Italy will be somewhere _____ of its production possibility frontier.

Use the following to answer questions: \\ -(Figure: Comparative Advantage) Use Figure: Comparative Advantage. Westland has a comparative advantage in producing:

The _____ of a curve shows the point at which the curve intersects an axis.

The models used in economics:

Use the following to answer questions: \\ -(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.

Which item is NOT a factor of production?

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

The principle of comparative advantage suggests that, if New York and Florida exchange taxi parts for oranges, each state will be made worse off.

"Steel tariffs will prevent job losses in the steel industry" is a positive statement.

When building a model, economists:

Use the following to answer question 124: \\ -(Table: Fish and Coconut Production Possibilities) Use Table: Fish and Coconut Production Possibilities. The table shows the maximum number of fish and coconuts that Tom and Hank can produce if they produce only one good. In the absence of trade, Tom produces and consumes 9 fish and 2 coconuts, and Hank produces and consumes 3 fish and 2 coconuts. Now they decide to engage in trade. Which statement is INCORRECT?

In looking at a chart of the positive relationship between police officers and crime, the mayor remarks that more police officers cause more crime. The mayor may be wrong because she did not consider:

Use the following to answer questions: -(Figure: Cold Drinks Sold and Temperature) Use Figure: Cold Drinks Sold and Temperature. If we move from point C to point D in the figure, the outside temperature has _____ degrees and the number of cold drinks sold has _____.

Use the following to answer questions: \\ -(Figure: Omar's Production Possibilities) Use Figure: Omar's Production Possibilities. The opportunity cost for Tom to move from point A on the curve to point B is:

Economists may disagree about policies because they:

Efficient production occurs when the economy is _____ its production possibility frontier.

Use the following to answer questions: \\ -(Table: Production Possibilities Schedule II) Use Table: Production Possibilities Schedule II. If the economy is producing at Y, the opportunity cost of producing at Z is _____ units of consumer goods per period.

If farmer Sam MacDonald can produce 200 pounds of cabbages and no potatoes or no cabbages and 100 pounds of potatoes and if he faces a linear production possibility frontier, the opportunity cost of producing an additional pound of cabbage is _____ pound(s) of potatoes.

All points inside the production possibility frontier represent:

Use the following to answer questions: -(Figure: Hot Drinks Sold and Temperature) Use Figure: Hot Drinks Sold and Temperature. If we move from point J to point L in the figure, the outside temperature has _____ degrees and the number of hot drinks sold has _____.