Practice_exam

# Practice_exam - Practice problems for the midterm Econ 100...

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Practice problems for the midterm Econ 100 This is longer than the midterm will be. But if you can do these problems without referring to your notes, you should do well on the midterm. 1a) Fill out this table: Peanut Butter Jelly Δ Peanut Butter Δ Jelly Opportunity Cost 18 0 15 6 12 11 9 15 6 18 3 20 0 21 1b) Why is the opportunity cost increasing? 2) Refer to this graph to answer the questions in #2 a) Which points are efficient? b) Which points are inefficient? c) Which points are unobtainable? d) What do you give up to move from point D to E? e) What do you gain in a move from point D to E? f) What do you give up to move from point B to C? g) What do you gain in a move from point B to C? F E D H G C B A 0 2 4 6 8 10 12 14 16 0 5 10 15 20 25 30 # of bottles of wine produced # of blocks of Cheese produced Production Possibilities Frontier

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3) a) Does one economy have the absolute advantage? If so – which one? b) Fill out this table (you don’t have to do your work in the table): Dopey Sneezy Opp cost of 1 iPod Opp cost of 1 hard drive c) Which economy has the comparative advantage in making iPods? Which has the comparative advantage in making hard drives? d) If there was trade, and we assume that one economy only produces iPods, while the other economy only produces hard drives, which economy will produce iPods, and which will only produce hard drives? e) Now assume that there is trade, and the economy that specializes in iPods exports 32 iPods, and the economy that specializes in hard drives exports 26 hard drives. Fill out this table: (30, 24) (4, 18) 0 10 20 30 40 50 60 0 10 20 30 40 50 # of hard drives # of iPods PPFs for Dopey and Sneezy Dopey Sneezy
No Trade Yes Trade Produce Consume Produce Export Import Consume Gains from Trade Dopey iPods Dopey hard drives Sneezy iPods Sneezy hard drives 4) In the table below are some facts about an economy. The only things that the economy

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Practice_exam - Practice problems for the midterm Econ 100...

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