3rd quarter final exam

1) What is a tariff?  Why is it dangerous to put tariffs on lots of different goods?                Name ____________________

2) What are the 3 problems of economic organization?

3) What does “laissez faire” mean?

4) How does a purely market economy function?

5) How does a purely command economy function?

6) How does a mixed economy function?

7) Define the 3 factors of production.

        Land –

        Labor –

        Capital –

8) A military factory has 100 tons of steel.  Assume that jeeps require 4 tons of steel, and tanks require 10 tons of steel.  Create a production possibilities frontier for the factory.

9) Below is a country’s production possibilities frontier for airplanes and automobiles.  How can a country’s production possibilities frontier expand?

10) Below is a country’s possibilities frontier for consumer goods and capital goods.  How can a country’s production possibilities frontier shrink?

11) What is an “opportunity cost”?

12) Name at least 3 opportunity costs of the Iraq War.

13) Below is a production possibilities frontier for wheat and robots.  Assume current production is 2 robots and 13 wheat.  What is the opportunity cost of the decision to produce 4 robots instead of 3 robots?

14) Production possibilities frontiers show how much can be produced at maximum efficiency.  Being on the PPF curve means that maximum efficiency has been reached.  What are two sources of inefficiency that could cause a country’s production to fall inside its PPF curve?