Test 3 review econ

The maximum Gabriel is willing to spend on sculpture is $15,000. The sculptor sold Gabriel the sculpture for $10,000. What is Gabriel's consumer surplus?

$5,000

(Figure: The Market for Hero Sandwiches) Consider the figure The Marker for Hero Sandwiches. At the competitive price of $5, 10 hero sandwiches are sold. At this price, consumer surplus equals ____, and producer surplus equals ____

$50; $25

Trade can be beneficial to trading partners because

It enables more goods and services to be obtained at a lower opportunity cost

Eliana and Olivia are at Barnes and Noble buying new calculators for the semseter. Eliana is willing to pay $75, and Olivia is willing to pay $100 for a graphing calculator. The price of a calculator at Barnes and Noble is $65. How much is their total consumer surplus?

$45

The United States must give up the production of 1,000 bicycles to produce 200 additional lawn mowers. The opportunity cost of producing 100 bicycles is ____ lawn mower(s)

20

(Figure: Market for Washing Machines) According to the figure, the equilibrium world quantity of washing machines (in thousands) sold is

50

(Table: Comprative Advantage for Mia and Juanita) The table provides data on how long it takes Mia and Juanita to mow the lawn and weed the flower beds Mias opportunity cost for mowing the lawn is ____, and juanitas opportunity cost for mowing the lawn is _____

weeding three flower beds; weeding two flower beds

Voluntary exhange happens when

both the buyer and the seller will gain from the trade

If a country's domestic price of a good is below the world price of the good, then with trade, the domestic quantity supplied of the good will be ____ the domestic quantity demanded

greater than

If Japan must give up the production of 100 computers to produce 25 additonal cellular telephones, the opportunity cost of producing four cellular telephones is ____ computers

16

(Figure: Market for Pants) Suppose that the world price of a pair of pants is $40. According to the figure, international trade will lead to ____ in the domestic producer surplus and ___ in the domestic consumer surplus

a decrease; an increase

the principle of comprative advantage applies to interactions

between people as well as in business production decisions

What is the basis of specialization

comparative advantage

Marginal benefit minus price equal

consumer surplus

(Figure:Market for Engine) According to the figure, if there is international trade in this market, and the world price of engines is $800, the value of the domestic producer surplus is

$320,000

(Figure Supply Curve 2) Use the supply curve for bottle of dish soap in the graph to answer the question

$45

(figure: market) Use the bath towel market graph to answer the question The towel market equilibrium. How large is the economic surplus?

$60

If the United states removed all tariffs and quotas on lumber imports into the United States

A producer surplus would decrease

(Figure: The Domestic Market for Sugar" Use figure: The Domestic Market for sugar. Assume that Pa is the domestic equilibrium price without trade and that Pw is the world price. Before international trade, consumer surplus is equal to the area

A+B+D

If a country has the compratuve advantage in producing lumber, then with free trade:

a producer surplus in the market for lumber will increase

A person is said to have a ____ in the production of a good if it can produce that good _____

Comparative advantage; at a lower opportunity cost than another person

Russia and Kazakhstan both produce horses and oil. If kaszkhastan is much more efficient than Russia in the production of horses and slightly more efficient than Russia in the production of oil, ____ can benefit from trading horses and oil with each other

Both countries

Ariana bought a new pair of shoes at Nordstrom. When she walked out of the store, she thought "I got such a great deal; I would have paid $40 more for these shoes!" This BEST represents the concept of:

Consumer surplus

The price of a cup of coffee goes up. This communicates to Stella that coffee has become more valuable. Price is functioning as

a signal

If Banish wants to capatilize on comparative advantage in his life, then he should:

Do more of what he is realtively good at and then trade for other things

In 2014, Donald Trump said, "When did we beat Japan at anything? They send their cars over here by the millions, and what do we do? When was the last time you saw a chevrolet in Tokyo? It doesn't exist, folks." Trumps argument fails to address which of the following economic arguments (that is, arguments based on correct interrpretation of econmoic theory)?

Japan may have comprative advantage in manufacturing, but the US has a comparative advantage in other goods, which it exports to Japan

If they spend all night writing computer programs, Laurence can write 10 programs while Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make 6 while Carrie Anne can make 4. We know that:

Leticias opportunity cost of writing poems is less than Isabellas

Figure: Marker for Engines) Suppose that the world price of an engine is $800. According to the figure, the domestic total surplus ____ by ____ in the free-trade equilibrium relative to the no international trade equilibrium

increases; $30,000

As long as people have different ________, everyone has a comparative advantage in something.

opportunity costs

Which is a common argument for trade protection?

The job creation argument

"The current trade deficit is $350 billion." This statement:

is positive

Efficient outcomes

may not make everyone happy

Statements about what opinion should be chosen are ___ statements

normative

Which statement is TRUE?

It is possible to have no absolute advantage but a comprative advantage in the production of some good

Figure: The market for Grapes in California) Use figure: The Market for Grapes in California. When the government imposes a traiff on imported grapes, the price of grapes in California rises from Pw to Pt, and theres a net ___ in the total surplus of _____

Reduction, D+F

Katie is much faster than her husband, brett, at putting up a tent and starting a fire, who should take care of these tasks on their camping trip if they want to maxamize their time sitting around a campfire?

They each have a comparative advantage in a particular task, and they should focus on doing that Katie can help Brett when she finishes her task

Use the graph of marginal benefit curves for slices of cheesecake to answer the question When the market price is $1, what is the total amount of cheesecakes slices purchases across Beca and Marcella

Twelve

Table: Bruno and Sasha's comprative advantage) The table provides data on the number of minutes it takes for Bruno and Sasha to change a tire and iron a dress shirt. Use the data to answer the question

Bruno because he has a lower opportunity cost

(Table: Shrimp and banana production possibilities) Use Table: Shrimp and banana production possibilites the table shows the maximum number of shrimp and bananas that Issa and Lawrence can pridce if they produce only one good. In the absence of trade, Issa produces and consumes nine shrimp and two bananas, and lawrence produces and consumes three shrimp and two bananas. Now they decide to engange in trade. Which statement is INCORRECT?

For both to become better off, each should speacialize in the production of some good. However, since henry is equally productive in both goods, if doesnt matter which good each specializes in

If France levies tariffs on American good entering France, in the short run, this will tend to ____ American producers and ____ French producers

Harm; benefit

A prediction market is a market where

Payoffs are linked to whether uncertain event occurs

Which of the following statements is TRUE regarding comparative advantage?

People can have a comprative advantage without having an absolute advantage in a task

(Figure: The Market for Apple Computers in the US) Use Figure: The Market for Apple Computers in the US. Assume that Pa is the domestic equilibrium price without trade and Pq is the world price. Producer surplus without international trade would be area

Y

Vietnam has a comprative advantage in ____ - skilled labor. This explains why Vietnam is a net ___ of high-skilled services

higher; importer

Which of the following is NOT an argument for limiting international trade? An increase in international trade may

lead to economic growth through specialization in comprative advantage

Markets distribute production across companies in a way that

minimizes costs

Analysis that describes what would happen if various actions were taken is _____ analysis.

positive

Prices in currency futures markers and bond markets provide

predictions of future exchange rates and inflation rates

The producer surplus on a unit sold equals

price minus marginal cost

Positive analysis is about

what is