Exam 3: The Economic Problem

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of growing another ton of potatoes?

A movement from one point on a production possibilities frontier to another represents

"Comparative advantage" is defined as a situation in which one person can produce

-Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas.Hotels are a capital good that,once built,will help produce still more consumption goods.If Puerto Rico produces more hotels than Hawaii,

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.If Deb and Pete specialize and trade,how many packets will be assembled?

If a country has

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

-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,Huey's opportunity cost of producing one pound of tomatoes is

When all of the available factors of production are being efficiently employed,the

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Cindy's opportunity cost of producing 1 taco is

The idea of increasing opportunity cost is reflected in the

The opportunity cost of producing more of one good on a production possibilities frontier is

When a country's production possibilities frontier shifts outward over time,the country is experiencing

Draw a production possibilities frontier between beans and peas.Label the unattainable points,the attainable points with fully employed resources,and the attainable points with unemployed resources.

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ and an absolute advantage in ________.

-The table above shows the production possibilities for an economy.The opportunity cost of a loaf of bread is ________ when moving from possibility B to possibility C.

-The figure above shows a nation's production possibilities frontier for apples and oranges. a.What combination of goods is represented by point A? b.What combination of goods is represented by point B? c.Which point represents an unattainable combination of goods? d.The movement from point C to point D results in a free lunch.What is the free lunch?

-The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour.Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?

As technology advances,

A country produces only apples and bananas.Moving from point A to point B along its production possibilities frontier,5 apples are forgone and 4 bananas are gained.What is the opportunity cost of a banana?