Exam 3: The Economic Problem

-The figure above shows a nation's production possibilities frontier.In the figure,point A shows

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.If Deb and Pete specialize and trade,how many packets will be assembled?

The United States can use all of its resources to produce 50 computers or 4,000 shoes.Suppose that at world market prices,one computer exchanges for 100 shoes.Explain how the United States can gain from trade.

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of growing another ton of potatoes?

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.The table shows that

As an economy increasingly specializes in producing one good,the opportunity cost of that good increases.The opportunity cost increases because

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

-Point D in the above PPF figure is

-Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

-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 or are they equally productive in both uses? Explain your answer.

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good,it is called

To calculate the opportunity cost per unit,you divide the decrease in the quantity of the forgone item by the

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is below point K,the next year's PPF would

-The table above presents the production possibilities frontier for a nation.Using the information in the table,when moving from possibility A to B to C to ultimately E,the cost of a unit of capital goods in terms of consumption goods

On a production possibilities frontier diagram,where are production points that have tradeoffs? Where are production points with a free lunch?

-The table above shows the production possibilities for an economy.Drawing a PPF with books on the vertical axis and bread on the horizontal axis,a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

Alice and Gene work in the mailroom,sorting and delivering mail.In order for them to benefit from specialization and trade,Alice must

What economic concepts are represented in the production possibilities model?

-The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour.Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?