Exam 2: The Economic Problem

-Omar and John can fix computers or write computer programs. The table above shows the number of computers they can fix and the lines of code they can write in a day. a) Who, if anyone, has the absolute advantage? b) Who has the comparative advantage in fixing computers? Why? c) Who has the comparative advantage in writing programs? Why?

A country that must decrease production of one good in order to increase the production of another

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________.

-In the figure above, point D is

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. A movement from point a to point b reflects

-According to the diagram in the above figure, what is the marginal benefit of consuming the 3 millionth gallon of gasoline per month?

-In the figure above, Jill is producing at point A. Jill's opportunity cost producing one pair of pants is

At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

-According to the figure above, the opportunity cost of producing another computer is

After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is

The production possibilities frontier itself illustrates

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange

Economic growth

If property rights are not clearly defined and enforced, then

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Opportunity cost is best defined as