Exam 3: The Economic Problem

3.5 Chapter Figures -The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods are efficient?

-In the table above, Jack's comparative advantage is producing ________ and Jill's comparative advantage is producing ________.

A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?

Why is the production possibilities frontier bowed out?

While moving along a production possibilities frontier, the amount of labor ________, the amount of capital ________, and the level of technology ________.

On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of bananas can be produced. Between these points, what is the opportunity cost of producing a pound of apples?

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

-The figure above illustrates a small country's production possibilities frontier. Based on the figure, we can tell that the nation's resources are

Possibility Capital goods Consumption goods A 0 60 B 2 55 C 4 45 D 6 25 E 8 0 -The table above presents the production possibilities frontier for a nation. Using the information in the table, moving from possibility C to B means that

A production point beyond the production possibilities frontier represents what?

-Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, which is India's most likely future PPF?

In one hour John can produce 20 loaves of bread or 16 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

Possibility Airplanes (number) Cruise ships (number) A 100 0 B 80 20 C 50 40 D 0 60 -The table above gives four production possibilities for airplanes and cruise ships. In possibility A, how many resources are devoted to the production of cruise ships?

While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range)is

A reason the production possibilities frontier exists is

A point on the production possibilities frontier reflects an

Explain why a movement from a point inside a production possibilities frontier to the production possibilities frontier is described as a free lunch and a movement along a production possibilities frontier is described as a tradeoff.

The sustained expansion of production possibilities is called

-The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀. At which of the following production points would the economy grow most rapidly?

When a person has a comparative advantage in producing a good or service, the person has