Exam 2: Economic Models

Labor and capital are the only two factors of production.

In the circular-flow diagram, an organization that produces goods or services for sale is a:

Use the following to answer questions : -(Table: Fish and Coconut Production Possibilities) The table Fish and Coconut Production Possibilities shows the maximum amount of fish or coconuts that Tom and Hank can produce when each produces only one of the goods. The table implies that Tom has a comparative advantage in the production of both goods.

"Unemployment of 5% is too high" is:

Use the following to answer questions : Figure: Production Possibility Frontier -(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. Points A, B, E, and F:

If they spend all night writing computer programs, Laurence can write 10 programs, and Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make 6 pairs, and Carrie Anne can make 4. We know that:

The production possibility frontier illustrates:

Absolute advantage is the basis for gains from trade.

Jim is being paid $7.25 an hour to work at a restaurant. In the circular flow this is an example of a:

Use the following to answer questions : -(Table: Coffee and Salmon Production Possibilities II) Look at the table Coffee and Salmon Production Possibilities II. This table shows the maximum amounts of coffee and salmon, both measured in pounds, that Brazil and Alaska can produce if they just produce one good. Brazil has an absolute advantage in producing:

An inward shift in the U.S. economy's production possibility frontier could represent U.S.:

In the circular-flow diagram, a firm is:

Businesses buy resources used to produce goods and services in the:

Increases in resources or improvements in technology will tend to cause a society's production possibility frontier to:

A firm is an organization that produces goods and/or services.

If the opportunity cost of manufacturing machinery is higher in the United States than in Britain and the opportunity cost of manufacturing sweaters is lower in the United States than in Britain, then the United States will:

The circular-flow diagram illustrates how households _____ goods and services and _____ factors of production.

Use the following to answer questions: Figure: Consumer and Capital Goods -(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. Point Z:

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. Based on this information, _____ has the absolute advantage in making brownies and _____ has the absolute advantage in making cookies.

Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which of the following best sets the stage for economic growth?