Exam 2: Economic Models

"The current rate of unemployment of 9% is too high" is a _____ statement.

Dr. Colgate is a dentist who employs an assistant, Ms. Crest. If Dr. Colgate worked all day at the front desk, she could answer 40 phone calls. If she worked all day with patients, she could clean the teeth of 40 patients. If Ms. Crest worked all day at the front desk, she could answer 60 phone calls. If she worked all day with patients, she could clean the teeth of 20 patients. _____ has a(n) _____ advantage in _____.

Suppose Oklahoma decides to produce only two goods, oil and football helmets. If Oklahoma is producing on its production possibility frontier, as oil production increases, the production of football helmets will:

Use the following to answer questions: Figure: Strawberries and Submarines -(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines. As the economy moves from point A toward point D, it will find that the opportunity cost of each additional submarine:

Use the following to answer questions : -(Table: Comparative Advantage I) Look at the table Comparative Advantage I. Finland has an absolute advantage in producing:

Before 2000, investors were reluctant to buy mortgage-backed securities because:

Alexander has a straight-line, or linear, production possibility frontier when he produces soybeans and corn. If he uses all of his resources to grow soybeans, he can produce 200 bushels of soybeans; if he uses all of his resources for corn production, he can produce 400 bushels of corn. Alexander CANNOT produce _____ bushels of soybeans and _____ bushels of corn.

If an economy is producing a level of output that is on its production possibility frontier, the economy has:

Explain how an economic model contributed to the financial crisis in 2008-2009.

Nations can gain from trade with other nations even if they are less productive in all industries than the nations they trade with.

If an economy produces the desired mix of goods from its available resources, then this mix of goods is:

A mortgage-backed security is an asset that provides earnings to its owner based on interest on the national debt paid by the Federal Reserve.

If countries engage in international trade:

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

Which of the following is a positive statement?

Use the following to answer questions : Figure: Comparative Advantage Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges, and this figure shows each nation's production possibility frontier for the two goods. -(Figure: Comparative Advantage) Look at the figure Comparative Advantage. The opportunity cost of producing 1 box of oranges for Eastland is _____ box(es) of peaches.

An apple is a resource sold in the factor market.

Use the following to answer questions : Figure: Production Possibility Frontier -(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. Which of the following is NOT an efficient rate of production per period?

"Many economists agree that income taxes should be increased for rich people" is a positive statement.

Economists are generally in support of: