Exam 2: The Economic Problem

-Refer to the above figure. Mario is self-sufficient and so is Mia. Each produces 6 dishes of pasta and 4 pizzas. Mario and Mia decide to specialize and trade. After they have specialized and traded, compared to the initial situation, Mia's opportunity cost of pasta has ________ and Mario's opportunity cost of a pizza has ________.

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a production point that is inefficient?

In general, the more resources that are devoted to technological research, the

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

We measure the marginal ________ of a good by what a ________ for another unit of the good.

The principle of increasing opportunity cost leads to

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be

-Vicky currently produces at point a in the figure above. If Vicky moves from point a to point b to point c, her opportunity cost of a modem ________.

-In the figure above, the marginal cost of the second computer is

Country A Country B -In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

-In the above figure, which point represents an unattainable production combination of the two goods?

-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. The opportunity cost of producing a unit of Y is

-The figure above shows Freda's PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is ________ of fudge.

-As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer.

-Abe can catch 15 pounds of fish an hour or pick 30 pounds of fruit an hour. He works an 8-hour day, spending 5 hours picking fruit and 3 hours catching fish. Calculate Abe's opportunity cost of a pound of fruit.

Each point on the production possibilities frontier achieves allocative efficiency.

Production possibilities -In the above table, the production of 3 pizzas and 80 cases of soda is

The production possibilities frontier

Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. The concert he will miss is Ted's ________ of studying for the exam.