Exam 3: The Economic Problem

Possibility Fish (pounds) Fruit (pounds) A 37 56 B 31 78 C 20 90 D 9 99 -Robinson Crusoe divides his time between catching fish and gathering fruit.Part of his production possibilities frontier is given in the above table.Mr.Crusoe,while lonesome,is efficient and always stays on his PPF.Mr.Crusoe is consuming 20 pounds of fish.Then he decides to slowly become a vegetarian and decrease his consumption of fish to 9 pounds.This decision means that Mr.Crusoe will

Possibility Robots Pizza A 0 40 B 1 39 C 2 37 D 3 34 E 4 30 F 5 20 G 6 0 -The table above shows a nation's production possibilities frontier.If the nation wants to produce 4 robots and 34 pizzas,

The gains from trade include: i.lower prices from competition ii.greater output from specialization iii.greater variety of goods and services available

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

During a time of high unemployment,a country can increase the production of one good or service

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy produced 4 million cell phones using the resources efficiently,the PPF would

Economic growth depends upon which of the following? i.Improving the quality of labor ii.Technological advancement iii.Increasing the amount of capital

Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty.What impact would this law have on the nation's production possibilities frontier?

-The figure above shows a nation's production possibilities frontier.In the figure,point A shows

Gains from trade

On a typical acre of land,Iowa can produce either 300 pounds of beef or 100 pounds of soybeans in a year.On a typical acre of land,Nebraska can produce 150 pounds of beef or 200 pounds of soybeans.Which of the following is correct?

A bowed out PPF reflects which of the following ideas? i.Increasing opportunity cost ii.Resources are not equally productive in all activities. iii.Prices of goods increase over time.

Describe the differences between tradeoffs and free lunches in terms of a PPF.

-The figure above shows a production possibilities frontier.In the figure,when the economy moves from point E to point D,what is the opportunity cost of a DVD?

Explain why specialization and trade increases a country's overall level of consumption.

If a country has

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

Potatoes (pounds) Tomatoes (pounds) Huey 12 or 8 Steve 6 or 2 -Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,which of the following statements is correct?

-In the above figure,Jill's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?