Exam 2: Economic Models and Gains From Trade

On a production possibilities frontier (PPF)that shows the trade-off between consumer goods and capital goods given a fixed amount of labor,unemployment is illustrated by:

Refer to the following figure to answer the questions that follow. -Which point on the figure shows inefficient use of resources?

Consider the following scenario to answer the questions that follow. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. -What is Joey's opportunity cost of baking a pie?

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

Why is the barter method of exchange NOT more common in the U.S.economy?

Suppose you are studying a production possibilities frontier (PPF)that has a bowed-out shape relative to the origin.What causes this shape?

Refer to the following figure for the questions that follow. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Refer to the following table to answer the questions that follow. -Given the same quantity of resources,what is Jay-Z's opportunity cost of producing a New York pizza?

Refer to the graph below.This society could reach point F when there is a(n):

To determine which of two producers has a comparative advantage,you would need to know:

Suppose you find a production possibilities frontier (PPF)that is shaped like a straight line.What can you determine about the production of the two goods?

Which of the following is a positive statement?

The existing entries in the following table show the maximum quantities of milk shakes or fruit smoothies the college president and dining hall staffer could make during an afternoon shift,given a fixed amount of resources. a.Fill in the remaining part of the table (be sure to label the units) and answer the questions below. b.Who has a comparative advantage in producing smoothies? c.Who has an absolute advantage in producing milk shakes?

Suppose that,during an afternoon at your favorite ski resort,you 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 your 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.Your production of each of these goods is subject to a constant trade-off,so be sure that in your 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.

Specialization and trade allow individuals to:

Which of the following is a positive statement?

Refer to the following figure to answer the questions that follow. -In the figure,point A is:

Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. -Given current resources and technology,the attainable range is best described as which places on the figure?

For both parties to benefit from specialization and trade,the trading parties must agree on:

At full employment,a society produces: