Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards Quizlet PDF

Preview

Summary

midterm study guide flashcards...

Description

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Terms in this set (78) Refer to the table to the right. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear - Inside Tomaso's production possibilities frontier Outside Tomaso's production possibilities frontier

- At the horizontal intercept of Tamaso's production possibilities frontier - Along Tomaso's production possibilities frontier - Outside Tomaso's production possibilities frontier

Unattainable

The points outside the production possibilities frontier are

The table above shows the output per month of two people, Fred and Barney. They can either devote Barney has a comparative advantage in making unicycles and Fred in making pogo

their time to making pogo sticks or making unicycles. Which of the following statements is true?

sticks.

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

1/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The production possibilities frontier shows the ________ Maximum attainable

combinations of two products that may be produced in a particular time period with available resources.

Refer to the diagram. Point B is Technically efficient

Product market

Can produce more of

When you purchase a new pair of jeans you do so in the

You have an absolute advantage whenever you

something than others with the same resources.

Refer to the diagram to the right which shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Suppose Mendonca is currently producing 60 pounds of vegetables per period. 75 pounds of meat

How much meat is it also producing, assuming that resources are fully utilized?

The ability to exercise control

The term 'property rights' refers to

over one's own resources within the confines of the law.

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

2/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a 2 necklaces

bracelet?

If the production possibilities frontier is ________, then Linear

opportunity costs are constant as more of one good is produced.

At a lower opportunity cost

Comparative advantage means the ability to

than any other producer.

produce a good or service

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except Produce a combination of goods that lie outside its own production possibilities frontier.

- Engage in mutually beneficial trade with other nations - Produce a combination of goods that lie outside its own production possibilities frontier - Increase the variety of products that it can consume with no increase in resources - Consume a combination of goods that lie outside its own production possibilities frontier

The primary purpose of ________ is to encourage the Patents and copyrights

expenditure of funds on research and development to create new products.

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

3/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

If the economy is currently producing at point Y, what is the opportunity cost of moving to point W?

Zero

The process by which

Adam Smith's invisible hand refers to

individuals acting in their own self-interest bring about a market outcome that benefits society as a whole.

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Haley's opportunity cost of making a 1 1/3 necklaces

Economic growth

bracelet?

An outward shift of a nation's production possibilities frontier represents

If the economy is currently producing at point W, what is the opportunity cost of moving to point X? 5 million tons of paper

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

4/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a 1/2 of a bracelet

necklace?

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote Haley has a comparative

their time to making bracelets or making necklaces.

advantage in making bracelets

Which of the following statements is true?

and Serena in making necklaces.

If all resources are fully and

The production possibilities frontier model shows

efficiently utilized, more of one

that

good can be produced only by producing less of another good.

The table to the right shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making Barney has an absolute

unicycles.

advantage in making both

Which of the following statements is true?

products.

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

5/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Increasing opportunity costs

A production possibilities frontier with a bowed-

are more and more of one

outward shape indicates

good is produced.

The figure shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. If Mendonca chooses to produce 160 pounds of 0 pounds of meat

vegetables, how much meat can it produce to maximize production?

Equal to the highest value of an

The opportunity cost of taking a semesterminuslong

alternative use of the time and

economics class is

money spent on the class.

Which of the following is not a factor of production? $1,000 in cash

- The manager of the local tire shop - An acre of farmland - A drill press in a machine shop - $1,000 in cash

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

6/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. 2 pogo sticks

What is Barney's opportunity cost of making a unicycle?

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. 1/2 of a unicycle

What is Barney's opportunity cost of making a pogo stick?

Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in the figure above represent Graph A

his production possibilities frontier?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

7/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Through technological

Without an increase in the supplies of factors of

advancement which enables

production, how can a nation achieve economic

more output with the same

growth?

quantity of resources.

It has to give up some of

If society decides it wants more of one good and all

another good and incur some

resources are fully utilized, then

opportunity costs.

________ is (are) inefficient in that not all resources are being used. Point A

Refer to the diagram to the right. Point C is Unattainable with current resources

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. 3 pogo sticks

What is Fred's opportunity cost of making a unicycle?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

8/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The production possibilities frontiers depicted in the diagram to the right illustrate Both the labor force and capital stock increasing

In the diagram, point G indicates an Unattainable result

Suppose the economy whose PPF is shown on the right experiences economic growth. 1.) Use the 3-point curved line drawing tool to show how growth affects the trade-offs the country faces between producing ships and food. 2.) Use the point drawing tool to draw and label a - An increase in the capital

point on the new PPF that shows the economy

stock

producing more of both goods. Label this point 'B'.

- Advances in technology

Carefully follow the instructions above and only

- A larger labor force

draw the required objects. Which of the following may have caused the shift you have drawn? (Check all that apply.)

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

9/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

On the diagram to the right, movement along the curve from points A to B to C illustrates

Increasing marginal opportunity costs.

The figure illustrates the trade-offs facing Ford Motor Company. The line in the graph is Ford's production possibilities frontier. If Ford uses all its resources to produce trucks, how many can it 10 thousand trucks per day

produce?

The figure illustrates the trade-offs facing Ford Motor Company. The line in the graph is Ford's production possibilities frontier. Suppose Ford is currently building 3 thousand cars per day. To build 2 thousand fewer trucks per

an additional 1 thousand cars, how many fewer

day

trucks can be built?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

10/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The figure illustrates the trade-offs facing Ford Motor Company. The line in the graph is Ford's production possibilities frontier. According to the graph, building 3 thousand cars per day and 3 Technically inefficient

A curve showing the maximum

thousand trucks per day is ________________.

A production possibilities frontier (PPF) is

attainable combinations of two products that may be produced with available resources and current technologies.

The production possibilities frontiers depicted in the diagram to the right illustrate Technological advances in the tank industry.

As part of their budget tightening process, many states are cutting aid to colleges and universities, Reducing your consumption of

with students being asked to pick up a bigger part

goods and services not

of the escalating tab of higher education.

essential to your education.

Which of the following would do the most to enable you to cope with those higher expenses without impairing your progress toward a degree?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

11/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

The longer you choose to

Prepping for a next-day exam over the course of an

study will result in an increase

evening (and possibly into the wee hours of test

in the number and value of

day) poses increasing costs since

foregone activities

The people of a previously quiet and peaceful country have come to recognize the need to Society's willingness to forego

expand and improve their security forces after a

other goods and services, both

wave of terroristic threats and acts.

public and private.

Considering their resource limitations, the extent to which security is enhanced will most likely be determined by

Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can Even though the demand for both liquor and dark chocolates has increased, the company can increase the production of only one variety.

produce 10,000 bars of dark chocolate per month if all its resources are used to produce only this variety. Similarly, using all its resources in the production of liquor chocolates, the firm can produce 8,000 bars per month. However, during a given month, the firm produces both varieties. Which of the following, if true, would suggest that the firm is operating on its PPF?

Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can produce 10,000 bars of dark chocolate per month if The firm believes in maintaining

all its resources are used to produce only this

a certain amount of excess

variety. Similarly, using all its resources in the

capacity to meet unexpected

production of liquor chocolates, the firm can

changes in demand.

produce 8,000 bars per month. However, during a given month, the firm produces both varieties. Which of the following, if true, would suggest that the firm is operating at a point inside its PPF?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

12/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Choco Dream is a firm that produces both dark chocolates as well as liquor chocolates. During a given month, the firm uses its resources to produce both varieties. Initially, the firm produced 5,000 bars of dark chocolates and 4,000 bars of liquor Choco Dream faces increasing

chocolates in a month. In order to increase

marginal opportunity cost in

production of the latter to 4,500, they had to

the production of liquor

reduce production of dark chocolates by 800 bars.

chocolates.

When demand for liquor chocolates increased further, Choco Dream produced 5,000 bars of liquor chocolates and 3,200 bars of dark chocolates per month. Which of the following inferences can be drawn from the given information?

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. Which The United States

country has an absolute advantage in producing tacos?

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

13/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. Which Mexico

country has a comparative advantage in producing tacos?

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. Suppose the United States is currently producing 80 tons of hamburgers and 36 tons of tacos and Mexico is currently producing 16 tons of hamburgers and 20 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good 24; 4

for which each has a comparative advantage), then a total of _____________ additional ton(s) of hamburgers can be produced for the two countries combined and a total of _____________ additional ton(s) of tacos can be produced.

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) https://quizlet.com/320160172/macroeconomics-mid-term-study-guide-chapter-2-hw-test-flash-cards/

14/21

8/2/2021

Macroeconomics Mid-term Study Guide (Chapter 2 HW & Test) Flashcards | Quizlet

Absolute advantage refers to

The primary difference between absolute and

the ability to produce more of

comparative advantage is

a good or service using the same amount of resources and comparative advantage refers to the ability to produce a good or service at a lower opportunity cost.

Has a comparative advantage in producing good 1.

Comparative

The substitution of domestic steel for foreign steel absorbs resources that would otherwise produce goods of greater value.

If country ABC can produce a unit of good 1 by sacrificing fewer units of good 2 than can country XYZ, it is correct to say that country ABC

The basis for trade is _______________ advantage.

A number of political leaders have expressed concern about the nation's decline as a major steel producer. Many have advocated policies to restrict imports and promote domestic production. These individuals would see their position weakened most by the knowledge that

The income lost while away

A freelance ...