Exam 2: The Economic Problem

-In the figure above, both Joe and Jill initially produce at point A. If Joe and Jill realize that they each possess a comparative advantage, which outcome can we expect?

The production possibilities frontier itself shows

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

In goods markets ________ and in factor markets ________.

In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can

An expansion of the production possibilities frontier is

If an economy is operating at a point inside the production possibilities frontier, then

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

Susan likes to drink sodas. The ________ soda Susan drinks, the ________ of the last soda.

Production points inside the production possibilities frontier

If the United States can increase its production of automobiles without decreasing its production of any other good, the United States must have been producing at a point

As a person consumes more of a good, the

-In the above figure, the curve labeled a is the ________ curve and the curve labeled b is the ________ curve.

The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. The allocatively efficient quantity of pizza is ________ pizzas per day.

A person has a comparative advantage in producing a particular good if that person

Markets are best defined as

Two social institutions that are essential for trade to be organized are ________.

-The table above presents the production possibilities of Farmer Brown. Use these data to calculate Farmer Brown's opportunity cost of additional beef as Farmer Brown moves from point A to B to C to D. Also use the data to calculate Farmer Brown's opportunity cost of additional wheat as Farmer Brown moves from point D to C to B to A. Based on these costs, does Farmer Brown use resources that are more productive in one activity than the other? Explain your answer.

-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X

The principle of decreasing marginal benefit implies that the