Exam 2: Model Building and Gains From Trade

Suppose that during Coco's afternoon shift working at the library, she could either reshelve books or process interlibrary loan ILL) requests. Draw a production possibilities frontier PPF) that describes Coco's production trade-offs. Her production of each of these goods is subject to increasing relative costs in production, so be sure that the graph reflects this fact. Now suppose that a new online request system increases Coco's efficiency at processing ILL requests but does not affect her reshelving ability. Show, on the same graph, how this new innovation changes the PPF.

Refer to the following figure for the next questions. -The opportunity cost of increasing production of apple pies from 14 to 16 pies is _______pies.

When the opportunity cost of producing a good rises as someone produces more of it, one experiences

The table below shows the maximum number of burgers or hot dogs that Frances and Takeru can cook in one hour. a. Fill in the rest of the table with the opportunity cost of burgers and hot dogs for each person. Be sure to include the units. b. Identify who has a comparative advantage in producing each good. Maximum Burgers Maximum Hot Dogs Opportunity Cost of 1 Burger Opportunity Cost of 1 Hot Dog Frances 30 60 Takeru 50 75

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

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier PPF)?

Which of the following is a normative statement?

An increase in general resources that affects the production of both goods on a production possibilities frontier PPF) would cause an

Consider the following scenario to answer the next questions: Two friends, Monica and Chandler, enjoy baking bread and making apple pies. Monica takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Chandler takes four hours to bake 1 loaf of bread and four hours to make 1 pie. -What is Chandler's opportunity cost of baking 1 pie?

Refer to the following figures to answer the next questions. -Which allocation point in the short-run production possibilities frontier PPF) will lead to no growth in the long-run PPF?

Consider the production possibilities frontier PPF) shown in the figure below to answer the next questions. -The set of efficient points is best described as

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is

Refer to the following figure for the next questions. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is_______ pies.

Consider the following scenario to answer the next questions: Kukla makes tables, with an opportunity cost of 3 rugs per every 4 tables. Zola makes rugs, with an opportunity cost of 2 tables per every 3 rugs. -Ollie proposes that Kukla give Zola 2 tables in exchange for 1 rug. What are Kukla's and Zola's reactions?

The ability of one producer to create more of a good than another producer using the same quantity of resources is called

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

For what kind of society does a shift away from the production of capital goods and toward the production of consumer goods make sense?

Which of the following is a normative statement?

One has an absolute advantage in producing something whenever

The figure depicts a shift in a society's production possibilities frontier PPF) for the manufacture of trains and planes: train-manufacturing capacity expands while plane-manufacturing capacity shrinks. Refer to this figure to answer the next questions. -Which point ceases to represent a production possibility?