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

Which of the following is a positive statement?

If two variables are positively related:

Use the following to answer questions: -(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Based on the table:

Use the following to answer questions: -(Table: Coffee and Salmon Production Possibilities) Look at the table Coffee and Salmon Production Possibilities. The table shows the maximum amounts of coffee and salmon that Brazil and Alaska can produce if they just produce one good. The opportunity cost of producing 1 unit of coffee for Brazil is:

Which of the following is a normative statement?

A linear curve has the same slope between every pair of points.

Use the following to answer questions: -(Table: Production Possibilities Schedule I) Look at the table Production Possibilities Schedule I. If the economy produces two units of consumer goods per period, it also can produce at most _____ units of capital goods per period.

Use the following to answer questions: Figure: Consumer and Capital Goods -(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. The movement from curve 1 to curve 2 indicates:

"Many economists agree that income taxes should be increased for rich people" is a positive statement.

Use the following to answer questions: -(Figure: Wine and Wheat) Look at the figure Wine and Wheat. If this economy is producing at point A and wants to produce at point B, it must:

Use the following to answer questions: -(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II. If the economy is producing at alternative X, the opportunity cost of producing at Y instead of X is _____ units of consumer goods per period.

In one hour, the United States can produce 25 tons of steel or 250 automobiles. In one hour, Japan can produce 30 tons of steel or 275 automobiles. This information implies that:

An economic model:

A bar graph:

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 B to point C in the figure, the outside temperature has ______ degrees and the number of cold drinks sold has ______.

Which of the following statements is TRUE?

Use the following to answer questions: Figure: Slope -(Figure: Slope) Look at the figure Slope. In the graph, the slope of the line between points A and B is:

All points inside the production possibility frontier represent:

Use the following to answer questions: Figure: Production Possibility Frontier -(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. The combination of cars and computers at point H:

The assumption ceteris paribus in a model means "other things equal."