Exam 2: Model Building and Gains From Trade

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the next four questions. a.Graph A b.Graph B c.Graph C d.Graph D e.Graph E -Suppose a great plague wipes out half of the society's population.Which of the following graphs best depicts how this would affect the PPF?

The production possibilities frontier (PPF) shows:

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

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

Forgoing current consumption so that those resources can be used to produce new capital is called:

The table below shows the maximum number of burgers or hot dogs that Vinny and The Situation can cook in 1 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.

Refer to the accompanying figure to answer the next four questions. -The inefficient point(s) is (are):

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

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

Refer to the following table to answer the next two questions. -Which statement best describes the opportunity cost evident in the production possibilities frontier (PPF) for the accompanying figure?

Refer to the following figure to answer the next four questions. -You can see that the opportunity cost of moving from point B to point D is different from the opportunity cost of moving from point D to point C because:

Goods that are produced for current consumption are called:

Refer to the following figure for the next two questions. -An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:

Greater investment in capital goods today leads to:

Refer to the following figure to answer the next four questions. -When the opportunity cost of producing a good rises as you produce more of it,you experience:

Refer to the following figure for the next three questions. -The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is:

Refer to the following figures to answer the next two questions. -Comment on the role of models in economics.What are the strengths and weaknesses of using them to explore the world around us?

Consider the following scenario to answer the next four questions: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. -You have an absolute advantage in producing something whenever:

One reason that economists make assumptions when designing models is to:

Which of the following is a normative statement?