Exam 2: Model Building and Gains From Trade

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF) at producing several things be made even better off by specialization and trade?

Michael and Angelo are both artists who can create sculptures or paint paintings each day.The following table describes their maximum outputs per day.Does either person have an absolute advantage?

What assumptions do economists make when developing a production possibilities frontier (PPF)?

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 next two questions. -Which statement best describes absolute advantage?

Consider the production possibilities frontier (PPF) shown in the figure below to answer the next three questions. -Given current resources and technology,the unattainable range is best described as:

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?

Explain how scarcity is the root cause of the trade-offs and opportunity cost illustrated in the production possibilities frontier (PPF).

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF) and make us better off in the future?

Why doesn't our society invest more resources into the production of capital goods to enhance the level of growth in our future production possibilities frontier (PPF)?

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 next three questions. -What is Gibbs's opportunity cost of making a wooden boat?

The accompanying figures depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli.If Jim and Pam were to specialize and trade,at what exchange rate would they find some quantity of trade to be mutually beneficial?

Refer to the following figure for the next two questions. -As you move from points N to M to L,the opportunity cost of additional apple pie:

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 new generation of baby boomers is entering the workforce.Which graph best depicts how this would affect the PPF?

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Angelo's opportunity cost of a sculpture?

Which of the following is a positive statement?

Refer to the following figure to answer the next four questions. -In the figure,point A is:

The area inside (within) the production possibilities frontier (PPF) contains:

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 next three questions. -What is Gibbs's opportunity cost of solving a crime?

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources.The community's production possibilities frontier (PPF) would show an:

Opportunity cost is evident on the production possibilities frontier (PPF) graph: