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

Use the following to answer questions: -(Table: Comparative Advantage I) Look at the table Comparative Advantage I. The opportunity cost of producing 1 box of herring for Finland is _____ box(es) of cell phones.

The financial meltdown of 2008-2009:

If they spend all night writing computer programs, Laurence can write 10 programs, and Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make 6 pairs, and Carrie Anne can make 4. We know that:

The _____ illustrates the trade-offs facing an economy that produces only two goods.

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 and Urbanville is producing 15 of Z and 45 of X. This combination is:

A typical bowed-out production possibility frontier between two goods, guns and butter, shows that the opportunity cost of butter in terms of guns increases as more butter is produced. This implies that the opportunity cost of guns in terms of butter decreases as more guns are produced.

Use the following to answer questions: -(Table: Comparative Advantage I) Look at the table Comparative Advantage I. Finland has an absolute advantage in producing:

The point at which the axes of a graph intersect is called the:

Of the following statements, which reflect(s) a normative view? I. The United States should increase the minimum wage to $10 per hour. II) There is a federal minimum wage in the United States. III) The federal minimum wage in the United States is less than $10 per hour.

Use the following to answer questions: -(Table: Trade-off of Study Time and Leisure Time) Look at the table Trade-off of Study Time and Leisure Time. A student sleeps 8 hours per day and divides the remaining time between study time and leisure time. The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day. Suppose the student completes a speed-reading course that allows him to do the same amount of studying in half as many hours. His opportunity cost:

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

In the product market, households buy goods and services.

"The current rate of unemployment of 9% is too high" is a _____ statement.

Labor and capital are the only two factors of production.

Explain how an economic model contributed to the financial crisis in 2008-2009.

Use the following to answer questions: Figure: Guns and Butter -(Figure: Guns and Butter) Look at the figure Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period.

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. If it was graphed, the relationship between wage per hour and hours willing to work would be:

The production possibility frontier illustrates:

Use the following to answer questions: Scenario: Linear Production Possibility Frontier Largetown has a linear production possibility frontier, and it produces socks and shirts with 80 hours of labor. The table shows the number of hours of labor necessary to produce one pair of socks or one shirt. -(Scenario: Linear Production Possibility Frontier) Look at the scenario Linear Production Possibility Frontier. If Largetown's labor resource decreases by 40 hours, the opportunity cost of producing shirts:

Use the following to answer questions: Figure: Strawberries and Submarines -(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines. Suppose the economy now operates at point C. Moving to point E would require that the economy: