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

A mortgage-backed security is an asset that provides earnings to its owner based on interest on the national debt paid by the Federal Reserve.

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

Use the following to answer questions: -(Figure: Wine and Wheat) Look at the figure Wine and Wheat. The opportunity cost of moving from producing ONLY wheat to producing ONLY wine is _____ tons of wheat.

Use the following to answer questions: Figure: Strawberries and Submarines -(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines. As the economy moves from point A toward point D, it will find that the opportunity cost of each additional submarine:

Use the following to answer questions: -(Table: Production of Good Z and Good X in Urbanville) Look at the table Production of Good Z and Good X in Urbanville. Suppose this table shows the production possibility frontier. Urbanville is producing at combination C and moves to combination D. What is the opportunity cost of this move?

Use the following to answer questions: Figure: Hot Drinks Sold and Temperature -(Figure: Hot Drinks Sold and Temperature) Look at the 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 ______.

A positive relationship between swimsuits purchased and ice cream purchased could be the result of:

The circular-flow diagram shows the flow of _____ and the flow of _____.

Use the following to answer question: Figure: Bicycles and Radishes II -(Figure: Bicycles and Radishes II) Look at the figure Bicycles and Radishes II. The country depicted in this figure is operating at point M. It could achieve production at point I only if it:

Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods:

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

An economy is said to have a comparative advantage in the production of a good if it can produce that good:

Use the following to answer questions: Figure: Seasonally Adjusted Unemployment Rate -(Figure: Seasonally Adjusted Unemployment Rate) Look at the figure Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year. What is the approximate slope of the graph between 1/2004 and 1/2006?

Use the following to answer questions: Scenario: Countries A and B Two countries, A and B, produce two goods, wheat (W) and steel (S). Each has a linear production possibility frontier in both goods. If country A spends all of its available resources to produce wheat, it can produce 500 tons of wheat and no steel. If it uses all of its resources to produce steel, it can produce 250 tons of steel and no wheat. If country B spends all of its available resources producing wheat, it can produce 400 tons of wheat, and if it spends all of its resources on the production of steel, it can produce 400 tons of steel. -(Scenario: Countries A and B) Look at the scenario Countries A and B. Given this information, the country that has the absolute advantage in wheat is _____, and the country that has the absolute advantage in steel is _____.

Mary spends $5 on food for her cat. This is an example of a:

If Brazil gives up three automobiles for each ton of coffee it produces, while Peru gives up seven automobiles for each ton of coffee it produces, then Brazil has a comparative advantage in _____ production and should specialize in _____.

Use the following to answer questions: Figure: Seasonally Adjusted Unemployment Rate -(Figure: Seasonally Adjusted Unemployment Rate) Look at the figure Seasonally Adjusted Unemployment Rate. The distance between each labeled point on the horizontal axis is one year. Unemployment was ______ between 1/2001 and 1/2003 and ______ between 1/2007 and 1/2008.

Taylor sees a bar graph showing the average weight of adult males over the past 200 years and concludes that men get more obese over time. Taylor's conclusion may be wrong, since she did not consider:

If two variables are positively related, on a graph they will always be represented by:

Use the following to answer questions: Figure: Tom's Production Possibilities -(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities. Which point or points represent(s) an inefficient combination of coconuts and fish?