Exam 2: Economic Models: Trade-Offs and Trade

Assume that Colombia gives up three motorcycles for each ton of coffee it produces, while Bolivia gives up seven motorcycles for each ton of coffee it produces. Colombia has a comparative advantage in _____ production and should specialize in _____.

Which statement is normative?

Which office of the U.S. government is a major employer of economists?

A normative statement deals with:

Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario BEST sets the stage for economic growth?

Nations can gain from trade with other nations, even if they are less productive in all industries than the nations with which they trade.

Coworkers Yvonne and Rodney are washing dishes and sweeping the floors of the store. They know that to finish both tasks as quickly as possible, each of them should focus on just one task, but they don't know who should do what. Yvonne and Rodney should determine which one:

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. Using this graph, the unemployment rate was at its lowest point (in the time window) shown in _____ and at its highest point (in the time window shown) in _____.

The circular-flow diagram illustrates how households _____ goods and services and _____ factors of production.

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

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. With specialization, _____ brownies and _____ cookies will be made in one day.

Use the following to answer questions: \\ -(Figure: Sugar and Freight Trains) Use Figure: Sugar and Freight Trains. Suppose the economy is operating at point C. The opportunity cost of producing the fourth freight train would be:

If Mary accepts a job as a nurse, she has sold a factor of production in the factor market.

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

The U.S. production possibility frontier will _____ if there is a large influx of working-age immigrants.

The relation between two variables that move in opposite directions is said to be:

If a production possibility frontier is a straight line, it tells us that the opportunity cost of producing one more unit of good X is:

If the United States is more productive than Mexico in all lines of production, then the United States cannot benefit from trade with Mexico.

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

In the factor market, firms buy goods and services.