Exam 2: Economic Models: Trade-Offs and Trade

If they produce only hamburgers, in a single day Sarah can produce 10 hamburgers, and Abe can produce 5 hamburgers. If they make milkshakes only, in a single day Sarah can produce 10 milkshakes, and Abe can produce 4 milkshakes. Therefore, _____ has an absolute advantage and a comparative advantage in making _____.

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.

Unemployment decreased to its lowest level in 10 years last month. This statement is a(n):

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

Free trade between countries:

If two variables are positively related:

Positive economics is the branch of economics that makes prescriptions about the way the economy should work.

Use the following to answer questions: -(Table: Coffee and Salmon Production Possibilities II) Use Table: Coffee and Salmon Production Possibilities II. This table shows the maximum amounts of coffee and salmon, both measured in pounds, that Brazil and Alaska can produce if they just produce one good. Brazil has an absolute advantage in producing:

In the circular-flow diagram, a household is a(n):

Use the following to answer questions: \\ -(Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing on the production possibility frontier, what would allow it to produce at point C? ==

Use the following to answer questions: -(Table: Coffee and Salmon Production Possibilities II) Use Table: Coffee and Salmon Production Possibilities II. This table shows the maximum amounts of coffee and salmon, both measured in pounds, that Brazil and Alaska can produce if they just produce one good. Brazil has a comparative advantage in producing:

Use the following to answer questions: -(Figure: Slope) Use Figure: Slope. The slope of the line in the graph can be calculated by:

If the production possibility frontier is a straight line:

Use the following to answer questions: \\ -(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 decrease in the amount of labor flowing to the firms that produce coconuts. If all other variables remain unchanged, this adjustment in the economy would be BEST represented in the production possibilities figure by a move from point A toward:

The models that economists construct:

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

Use the following to answer questions: -(Figure: Seasonally Adjusted Unemployment Rate) Use Figure: Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year, and the distance between each labeled point on the vertical axis is one percentage point of unemployment. Unemployment was _____ between 1/2001 and 1/2003 and _____ between 1/2007 and 1/2008.

Which statement is normative?

Which of the following is sold in the factor market?

In a single day, Sarah can produce 10 hamburgers, and Abe can produce 5 hamburgers. Therefore, _____ has a(n) _____ advantage in making hamburgers.