ECON 213 InQuizitive 2 Model Building and Gains from Trade Assignment solutions complete answers

ECON 213 InQuizitive 2 Model Building and Gains from Trade Assignment solutions complete answers 

Chapter 2: Model Building and Gains from Trade

 

The figure shows an increase in resources that shifts the production possibilities frontier from PPF1 to PPF2. Suppose the economy was and is only producing pizzas. How many more pizzas can the economy produce after the shift to PPF2?

 

What simplifying assumption would explain the straight-line appearance of the production possibilities frontier (PPF) in the figure?

 

In one week, Jedidiah Schlepp can produce 24 gizmos or 20 whatsits. What is the opportunity cost ratio in gizmos per whatsit? Give the answer to one decimal place.

 

Gwen and Blake are the only producers in an economy with two goods, wings and pizza. What is wrong with the following statement?

“Whether Blake should make pizza or wings depends on which good he can make more of.”

 

Which of the following are common terms for spending on infrastructure (such as highways), production facilities (such as factories), schools, attending college, or anything else that will increase future production possibilities?

 

Which numbers would be used to calculate Blake Piazza’s opportunity cost for producing wings?

 

A community of woodworkers produces tables and chairs. If five new members join who specialize in chairs, the community will be able to produce both more tables and more chairs because the increase in labor resources has shifted the entire production possibilities frontier (PPF) upward and outward.

 

Assume that an economy produces only two goods, pizza and wings. Place the events in order to show how an improvement in pizza-making technology would lead to an increase in wing production.

 

Correlation does not always indicate direct causation.

 

Malika just got hired by Amazon to work in upper management. She currently lives in South Carolina, and has to move to California for the job. Which of the following would be a good economic reason for her to move her personal belongings on her own rather than hiring someone else?

 

In a society producing hamburgers and french fries, the workers are producing at point A on the production possibilities frontier (PPF). Suppose there is an increase in the technology for deep fryers that impacts only the production of french fries. Click on another point on the PPF that shows a level of production that reflects improvement in deep fryer technology and shows a level of production where the society is actually producing fewer French fries than it was at point A.

 

Fill in the blanks to complete the sentence about factors that can impact a model.

During the coronavirus pandemic, scientists used models containing multiple variables to help make predictions about the spread of the virus. These variables, also referred to as factors, can either be –Press Space to open
excluded
outcomes
included
endogenous
exogenous
supply and demand
ceteris paribus
, meaning they are –Press Space to open
excluded
outcomes
included
endogenous
exogenous
supply and demand
ceteris paribus
 in the model; or –Press Space to open
excluded
outcomes
included
endogenous
exogenous
supply and demand
ceteris paribus
, meaning they are –Press Space to open
excluded
outcomes
included
endogenous
exogenous
supply and demand
ceteris paribus
 from the model.

 

Match the appropriate label to each specific good.

 

In one month, Mikhail’s Furnishings can make 160 carpets or 160 quilts, whereas Dominique’s Parlor can make 120 carpets or 200 quilts. Currently, Mikhail’s is making 80 carpets and 80 quilts per month whereas Dominique’s is making 60 carpets and 100 quilts. If from now on Mikhail’s starts making nothing but carpets and Dominique’s makes nothing but quilts, and the two shops trade 90 quilts from Dominique’s for 70 carpets from Mikhail’s every month, what will be each shop’s gain from trade? Answer the question by matching gains to shop.

 

In one year, Wynn Debbler can make 90 pairs of pants or 30 coats, whereas Peg Michaels can make 100 pairs of pants or 30 coats. They discuss an arrangement in which Peg gives Wynn pants in exchange for coats, so that they both benefit. Which of the following arrangements would be an acceptable trade-off of pants and coats that falls between the opportunity costs of both Wynn and Peg?

 

Match the appropriate label to the direction (positive or negative) of the relationship of each pair of variables.

 

Identify whether these statements are normative or positive.

 

Juan and Wanda both make pancakes and bacon. If we compare the opportunity costs and possible gains from trade for Juan and Wanda, we can determine the exact exchange ratio at which the parties will agree to trade.

 

Suppose Canada is currently planning to produce on PPF1 at point A on the graph shown below. Producing at point A now will allow Canada to produce at point B in the future. Now instead, suppose Canada decides to produce more consumer goods and fewer capital goods than is shown at point A. Click on the area of the graph where the likely future PPF will be if Canada chooses to change the current production of capital and consumer goods as indicated.

 

Dinesh notices that many people with gym memberships are overweight. He concludes that gym memberships make people gain weight. What is the error in Dinesh’s confusion as it relates to correlation versus causation?

 

Assume that an economy produces only two goods, pizza and wings, and that it is producing on its production possibilities frontier (PPF). If the economy can only produce two goods, which of the following ways would allow the economy to produce even more pizza?

 

Each box below describes a relationship between two variables that has been interpreted incorrectly. Match the appropriate label to each mistake.

 

Tahani and Chidi produce ties and belts. Chidi can produce a maximum of 120 ties or 40 belts and Tahani can produce 90 ties or 60 belts. They decide to specialize in their respective comparative advantage of production, and they agree to trade at a rate of 2 ties = 1 belt. If Chidi agrees to trade 50 ties with Tahani, which of the following represents Tahani’s PPF and what she can have after trade?

 

Identify each statement as either causing an increase or a decrease in the production of restaurant and bar services during the coronavirus pandemic of 2020, and thus shifting the production possibilities frontier (PPF) outward or inward.

 

In one day, Al’s Furniture can make 3 tables or 4 chairs, whereas BIG Furniture Warehouse can make 20 tables or 30 chairs. Match the concept to the corresponding description.

 

In economics, the Latin phrase “ceteris paribus” means “other things being equal.” How does the assumption of this phrase help economists when building models?

 

Assume that an economy produces only two goods, pizza and wings, and that they are producing on their production possibilities frontier. Which of the following are ways to increase the maximum possible number of pizzas produced?

 

Fill in the blanks to complete the sentence about the production possibilities frontier.

A production possibilities frontier is a – summarizing the different ways a society’s – could be used –, assuming those resources –.

 

What methods may an economist use to test a hypothesis?

 

Apply the appropriate label to each pair of variables.

team t-shirt sales and the winning percentage of the team, seat belt use and car crash fatalities, ice cream sales and temperature, rainfall and number of visitors at a golf course

 

The figure shows the production possibilities frontier for an economy that produces only two goods, pizzas and wings. Label each point in the figure with the appropriate description

not currently possible, efficient mix of both pizza and wings, maximum wings, maximum pizza, inefficient mix of both pizza and wings

 

Drag each formula to the part of the graph where it would be most useful.

area = one-half1212 × height × base, area = height × base, slope = StartFraction change in y Over change in x EndFractionchange in ychange in x

 

Each box below describes a relationship between two variables that has been interpreted incorrectly. Apply the appropriate label to each mistake.

Drinking a lot of water leads to sunburn. People who visit the dentist are more likely to get a cavity. Cars that mechanics work on regularly are more likely to break down. People become tired when they wear athletic clothes. 

 

What were the key factors that made the Wright brothers’ wind tunnel a useful tool for wing design?

allowed measurement of wing performance, enabled independent control of each key variable, could be used without prior knowledge of aerodynamics, included an element of unpredictability

 

Assume that an economy produces only two goods, pizza and wings. Place the events in order, to show how an improvement in pizza-making technology would lead to an increase in wing production.

 

Calculate the slope of the curve between points B and C.

 

In the figure, PPF1 represents society today and PPF2 represents society in the future, after a period of technological progress. Click on the two sections of PPF1 associated with the biggest expansion of PPF2.

 

What simplifying assumption would explain the straight-line appearance of the PPF in the figure?

 

The production resources are fixed even if their use changes.

Society naturally produces at full capacity.

 

Correlation does not always indicate direct causation

 

Which numbers would be used to calculate Mike Piazza’s opportunity cost for producing wings?

 

The figure shows an increase in resources that shifts the production possibilities frontier from PPF1 to PPF2. For someone producing only wings, what is the change in opportunity cost compared with producing only pizza?

 

Fill in the blanks to complete the passage about positive and normative statements. A       statement can be tested and validated by gathering     . By contrast, a       statement is assessed in light of        and opinions.

 

In A Knight’s Tale, three friends are deciding what to do with 15 silver coins they won in a jousting tournament. They can spend their winnings immediately and live the good life for a while, or they can spend the money on training for the next tournament. They ultimately decide to spend most of the winnings on training for the next tournament. What does their decision represent? More than one choice may be correct.

 

Which country is a good example of a high present rate of investment and a low present rate of consumer goods consumption?

 

Click on the region of the figure that best fits this description: Making more pizzas has a very high opportunity cost.

 

Interpret the time-series graph below to determine the five-year time span in which the inflation rate changed the most.

 

A health club membership could be considered a form of investment

 

Which of the following types of graphs would be appropriate for data about a single variable?
 

Which of the following is not a characteristic of a good economic model?
 

By comparing opportunity costs and gains from trade for two parties each making the same two goods, one can determine the exact exchange ratio at which the parties should agree to trade.

 
 

In one month, Mikhail’s Furnishings can make 160 carpets or 160 quilts, while Dominique’s Parlor can make 120 carpets or 200 quilts. Currently, Mikhail’s is making 80 carpets and 80 quilts per month while Dominique’s is making 60 carpets and 100 quilts. If from now on Mikhail’s starts making nothing but carpets and Dominique’s makes nothing but quilts, and the two shops trade 90 quilts from Dominique’s for 70 carpets from Mikhail’s every month, what will be each shop’s gain from trade? Answer the question by matching gains to shop.

 

Which graph might represent the relationship between rainfall and raincoat sales?

 

Fill in the blanks to complete the passage about trade-offs. It is characteristic of       goods that they are not used up in the short run. A society can choose to        some quality of life now—fewer consumer goods—in order to build up its stock of capital goods. This will lead to a         —and more consumer goods—later on.

 

 

People become tired when they wear athletic clothes. Drinking a lot of water leads to sunburn. Cars that mechanics work on regularly are more likely to break down. People who visit the dentist are more likely to get a cavity.

 

Which of the following statements is normative rather than positive?

 

Fill in the blanks to complete the passage about gains from trade. 

To have –Press Space to open
impossible
an absolute
a comparative
possible
unusual
common
gains from trade
opportunity cost advantage means to be able to produce more using the same resources. To have –Press Space to open
impossible
an absolute
a comparative
possible
unusual
common
gains from trade
opportunity cost advantage means to have a lower –Press Space to open
impossible
an absolute
a comparative
possible
unusual
common
gains from trade
opportunity cost. Comparative advantage is the basis for –Press Space to open
impossible
an absolute
a comparative
possible
unusual
common
gains from trade
opportunity cost. It is –Press Space to open
impossible
an absolute
a comparative
possible
unusual
common
gains from trade
opportunity cost for a producer to have a comparative advantage in both goods.

 

Dinesh notices that many people with gym memberships are overweight. He concludes that gym memberships make people gain weight. What is the error in Dinesh’s thinking?

 

A bar graph is usually the best choice for graphing one variable to show proportions.

 

What is the opportunity cost of moving from point A to point C? Give your answer as a number followed by a type of item.
 
An economic model is always a simplification.

 

What Latin phrase means “other things being equal”?

 

When a society moves from point A to point B along PPF1, the result is that PPF2 expands as shown. What phenomenon does this represent?

 

 

Fill in the blanks to complete the sentence about the law of increasing opportunity cost. According to the law of increasing opportunity cost, as a society      more and more of a certain good, further production       involve ever-greater opportunity costs, so that producing the good is associated with greater and greater        .

 

Attach the appropriate label to each specific good.

 

1.
Assume that an economy produces only two goods, pizza and wings. Which are ways to increase the maximum possible number of pizzas produced?
 
 
2.
Calculate the slope of a line passing through point A at (2, 1) and point B at (4, 2). Calculate to one decimal place.
 
 
5.
Homer notices that he gains more weight if he eats more doughnuts. 

There is a ______ correlation between the number of doughnuts Homer eats and his weight. If Homer wants to lose weight, he should eat ____ doughnuts. If Homer graphed this relationship on a scatterplot, an increase on the y axis would lead to ______ on the x axis.
 
 
6.
In one day, Al's Furniture can make 3 tables or 4 chairs, while BIG Furniture Warehouse can make 20 tables or 30 chairs. Match the concept to the description.
 
 
7.
In one month, Mikhail's Furnishings can make 160 carpets or 160 quilts, while Dominique's Parlor can make 120 carpets or 200 quilts. Currently, Mikhail's is making 80 carpets and 80 quilts per month while Dominique's is making 60 carpets and 100 quilts. If from now on Mikhail's starts making nothing but carpets and Dominique;s makes nothing but quilts, and the two shops trade 90 quilts from Dominique's for 70 carpets from Mikhail's every month, what will be each shop's gain from trade?
 
 
8.
In one week, Jedidiah Schlepp can produce 24 gizmos or 20 whatsits. What is the opportunity cost ratio, in gizmos per whatsit? Give the answer to one decimal place.
 
 
9.
In one year, Wynn Debbler can make 90 pairs of trousers or 30 coats, while Peg Michaels can make 100 pairs of trousers or 30 coats. They discuss an arrangement in which Peg gives Wynn trousers in exchange for coats, so that they both benefit. Which arrangements should be acceptable to both Wynn and Peg?
 
 
10.
Fill in the blanks to complete the sentence about model failure in the Great Recession. Leading up to the Great Recession, a major problem with computer models used by – to predict the performance of – was that the models were designed to assume that real estate – would always –.
 
 
11.
Mike and Debra are the only producers in an economy with two goods, wings and pizza. What is wrong with the following statement?

"Whether Mike should make pizza or wings depends on which he is better at making"
 
 
12.
Natalia notices that if she does not sleep a lot at night, she feels tired the next day. What relationship (if any) exists between hours of sleep and degree of exhaustion?
 
 
13.
Place the steps that make up the scientific method in their proper order.
 
 
14.
A production possibilites frontier is a _____ summarizing the different ways a society's _____ could be used ______, assuming those resources _______
 
 
15.
A pro football quarterback has to move to a new house. What would be a good economic reason for him to do his own moving rather than hiring someone else?
 
 
 

16.
Reverse causation or omitted variable?
 
 
17.
A community of woodworkers produces tables and chairs. If five new members join who specialize in chairs, the community will be able to produce both more tables and more chairs because the increase in labor resources has shifted the entire PPF upward and outward.
 
 
19.
Fill in the blanks to complete the passage about consumer goods and capital goods. Trade-offs between the – and the future require weighing the –available today against what will be available tomorrow. A good produced for present – is a – good; a good that will help in the production of other valuable goods for the – is a – good.
 
 
20.
What is the usual term for spending on infrastructure, production facilities, or anything else that will increase future production possibilities?
 
 
21.
When the Wright brothers designed their aircraft, they built a wind tunnel to model the aerodynamics of different wing designs. Identify each of the factors below as endogenous or exogenous to the Wright brothers' model
 
 
22.
Which statement is normative rather than positive?
 
 
23.
Which type of graphs would be appropriate for date about a single variable?