Exam 2: Model Building and Gains From Trade

Consider the following scenario to answer the following 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 1 table in exchange for 2 rugs.What are Kukla's and Zola's reactions?

Mikhail and Stefan 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 following questions. -Based on the table,does Mikhail or Stefan have an absolute advantage?

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.

use the figure below to answer the following questions : -The opportunity cost of increasing production of apple pies from 14 to 16 pies is ________ pies.

The process of using current resources to create or buy new capital is called

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?

The scientific method and the tools of economics are useful in examining

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?

use the figures below to answer the following questions : the production possibilities frontier (PPF)curves,which compare the ancient production of agricultural products to art and literature A. B. C. D. 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?

Economic growth is represented on a production possibilities frontier (PPF)by the PPF

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. -If Monica and Chandler decide to specialize in order to maximize their combined output,who should produce what?

The ability of one producer to produce a good at a lower opportunity cost than another producer is called

Why do economists use models?

use the figure below to answer the following questions : -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is ________ pies.

Goods that are produced for current consumption are called ________ goods.

At full employment,a society produces

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

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

One reason that economists make assumptions when designing models is to

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