Exam 2: Model Building and Gains From Trade

On the television show MythBusters,the hosts design experiments,collect data,and test theories based on popular myths.This is an example of

Why is the concept of ceteris paribus important for model building?

Consumer goods

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the following questions. -What is DiNozzo's opportunity cost of making a wooden boat?

Is there an opportunity cost to increased investment in capital goods today?

Refer to the following figures to answer the following questions. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to the most significant growth in the long-run PPF?

Why might Shaquille O'Neal,a 7'1" former National Basketball Association (NBA)player,hire professional movers to help him move,even though his size and strength likely make him more proficient (better)at furniture moving than the professionals he may hire?

Consider the production possibilities frontier (PPF) shown in the figure below to answer the following questions -Given current resources and technology,the attainable range is best described as

Which of the following is NOT an assumption that economists make when developing a production possibilities frontier (PPF)?

The ________ states that the opportunity cost of producing a good always rises as one produces more of it.

A positive statement

Explain how trading of goods creates value without creating any new goods.

In the movie A Knight's Tale,three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performances.Use appropriate production possibilities frontiers (PPFs)and words to describe the investment trade-off they face.

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the following questions. -What is DiNozzo's opportunity cost for solving a crime?

Comment on the role of models in economics.What are the strengths and weaknesses of using them to explore the world around us?

Draw a production possibilities frontier (PPF)that shows a pizza shop's production trade-offs between producing pizzas and stromboli.Suppose the pizza shop upgrades to a larger,more automated oven.On the same graph,show how the PPF changes.(The oven is used to bake both pizzas and stromboli.)

When testing a paper airplane on a campus quad,which of the following would be an exogenous factor?

A model without any simplifying assumptions

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has

Suppose that,during an afternoon at Hambre's favorite ski resort,Hambre could either make additional runs down the slopes or produce and sip hot chocolate by the fire in the lodge.Draw a production possibilities frontier (PPF)that describes his production trade-offs between runs skied (by riding the chairlift to the top and skiing down the slope)versus cups of hot chocolate produced and sipped.Hambre's production of each of these goods is subject to constant marginal opportunity costs in production,so be sure that,in the graph,the opportunity cost of one activity in terms of the other is the same at any point on the PPF. Now suppose that a new superfast ski lift reduces the time it takes to get to the top of the mountain.Show,on the same graph,how this changes the PPF.