Exam 2: Economic Models: Trade-Offs and Trade 25

Use the following to answer questions: Figure: Unemployment Rate over Time -(Figure: Unemployment Rate over Time) Look at the figure Unemployment Rate over Time. In the time-series graph, as we move from the beginning of 2001 to the beginning of 2003, we see that the unemployment rate has _____ from approximately _____ to approximately _____.

Use the following to answer questions: -(Table: Crab and Cake Production in Chesapeake) Look at the table Crab and Cake Production in Chesapeake. The table shows the maximum annual output combinations of crabs and cakes. Given the scarce resources and limited technology, as Chesapeake uses more resources for the production of cakes, fewer resources are available to produce crabs. Can this nation produce 200 crabs and 500 cakes? Is this efficient? Explain.

Use the following to answer questions: -(Table: Comparative Advantage I) Look at the table Comparative Advantage I. Sweden has a comparative advantage in producing:

Before 2000, investors were reluctant to buy mortgage-backed securities because:

Use the following to answer question: -(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The table shows the maximum possible production of wheat and aluminum for both the United States and Germany. Are gains from trade possible between these nations? Explain.

In the circular-flow diagram, the product market is where:

The economy's factors of production are not equally suitable for producing different types of goods. This principle generates:

Because of trade, a country may:

Use the following to answer questions: Figure: Comparative Advantage Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges, and this figure shows each nation's production possibility frontier for the two goods. -(Figure: Comparative Advantage) Look at the figure Comparative Advantage. Eastland has an absolute advantage in producing:

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 _____.

Use the following to answer questions: -(Table: Price, Quantity Demanded, and Quantity Supplied) Look at the table Price, Quantity Demanded, and Quantity Supplied. A straight line represents the relation between:

It is impossible for economists to use computers to simulate how the economy works.

Use the following to answer questions: -(Table: Production Possibilities Schedule I) Look at the table Production Possibilities Schedule I. The opportunity cost of producing the third unit of consumer goods is _____ units of capital goods.

Use the following to answer questions: Figure: Strawberries and Submarines II -(Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II. Suppose the economy is operating at point A. The first submarine, which is achieved at point B, would have an opportunity cost of _____ million tons of strawberries.

Use the following to answer questions: Table: Wages and Hours Willing to Work -(Table: Wages and Hours Willing to Work) Look at the table Wages and Hours Willing to Work, which shows data on wage per hour and the number of hours someone is willing to work. Which variable would economists put on the vertical axis?

In the circular-flow diagram households receive money for _____ in the _____ market.

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:

Roommates Sarah and Zoe are hosting a Halloween party and have to make food for their guests and costumes for themselves. To finish both tasks as quickly as possible, Sarah and Zoe know that each of them should focus on just one task, but they don't know who should do what. Sarah and Zoe should determine which roommate:

Economists generally believe that a country should specialize in the production of a good or service if:

Professor Macro wants to use a numerical graph to show the percentage of government spending accounted for by its various components. Which of the following graphs is most suitable for this purpose?