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?

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 chooses to increase the production of robots from 2 to 3 and it is on its PPF, it will have to forgo ________ pizzas.

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

"If Mexico is currently operating at a point inside its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

-The figure above shows the production possibilities frontier for a country. A combination of 3 million gallons of milk and 3 million gallons of ice cream is

The United States is one of the richest nations in the world,

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

-In the table above, Jill's opportunity cost for 1 pound of food is ________ and her opportunity cost for 1 pound of clothing is ________.

Possibility Bread (number) Books (number) A 0 1,000 B 100 900 C 200 700 D 300 400 E 400 0 -The table above shows the production possibilities for an economy. Drawing a PPF with books on the vertical axis and bread on the horizontal axis, a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

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 opportunity cost of a good increases as more of it is produced because

-The above figure shows the production possibility frontier for an economy. The point or points that are attainable and production efficient are

How is economic growth shown in a production possibilities frontier graph?

Moving along a country's PPF, a reason opportunity costs increase is that

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

Nation A's production in 1 day Nation B's production in 1 day Computers 100 Computers 120 Software 140 Software 150 -Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

A movement from a point inside the production possibilities frontier to a point on the production possibilities frontier represents

A country produces only cans of soup and ink pens. If the country produces on its bowed outward PPF and increases the production of cans of soup, the opportunity cost of additional

-The table above gives the production possibilities frontier for a nation that produces wheat and soybeans. Use the information in that table to complete the table below, which has in it the opportunity costs of moving from one production point to another. Do not forget to note the units of the opportunity costs.

-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.. According to the figure, which island will have more rapid economic growth?