Exam 2: Economic Models: Trade-Offs and Trade

Use the following to answer question: -(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.Assume the economy's current production possibilities frontier is given by curve 1.Point Z:

Fertilizer,used to grow pumpkins,is a factor of production.

Because Casey can type reports faster and more accurately than Ahmet,Casey has a(n)_____ in typing reports.

In the simplest circular-flow model,households supply _____ and demand _____.

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.The production of 8 units of consumer goods and 2 units of capital goods per period would result in:

Economists may disagree about policies because they:

Use the following to answer question: -(Figure: Wine and Wheat)Use Figure: Wine and Wheat.The opportunity cost of moving from producing ONLY wheat to producing at point D is _____ tons of wheat.

Which statement is normative?

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

Use the following to answer question: -(Figure: Sugar and Freight Trains)Use Figure: Sugar and Freight Trains.Suppose the economy is operating at point C.The opportunity cost of producing the fourth freight train would be:

The concept of comparative advantage is based on:

Use the following to answer question: -(Figure: Production Possibility Frontier for Tealand)Use Figure: Production Possibility Frontier for Tealand.Tealand is producing at point C on its production possibility frontier.What is the opportunity cost of increasing the production of tea from 20 million cups to 30 million cups?

Use the following to answer question: -(Table: Production of Good Z and Good X in Urbanville)Use Table: Production of Good Z and Good X in Urbanville.This table shows the production possibility frontier for Urbanville.Suppose Urbanville is producing at combination C and moves to combination D.What is the opportunity cost of this move?

Use the following to answer question: -(Figure: Omar's Production Possibilities)Use Figure: Omar's Production Possibilities.The opportunity cost for Tom to move from point B on the curve to point A is:

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.Sweden has a comparative advantage in producing:

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

The basis of the circular-flow diagram is that the money flowing into each sector or market is greater than the money that flows out.

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

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of herring for Finland is _____ box(es)of cell phones.

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