PLSC 412 Exam 1 questions and
answers A+ rated (7)
What's opportunity cost? - correct answer ✔✔The amount of the good or service that is sacrificed in
order to produce another good or service
How to calculate opportunity cost? - correct answer ✔✔40 Shirts or 30 computers. 1 shirt= 30/40 (3/4)
((.75)) computers.
How comparative advantage defined? - correct answer ✔✔Country has comparative advantage in
whichever good it has a lower opportunity cost compared to others
Production possibility frontier - correct answer ✔✔Any economy has limited resources
To produce more of one good, the economy must sacrifice some production of another good
As you produce more computers, you produce less shirts
Consumption indifference curves - correct answer ✔✔Given budget constraint, consumers will acquire
goods (e.g., shirts & computers) in the combination to maximize their collective utility.
Shows different combinations of goods (e.g., shirts & computers) between which a consumer is
indifferent.
The Stolper-Samuelson Theorem (the factor endowment model) - correct answer ✔✔Abundant factor
owners always win from free trade, scarce factor owners always lose from free trade
Due to price changes and factor's ability to move to different industry.
, The Stolper-Samuelson Theorem Implications: - correct answer ✔✔class-based political cleavages
(Laborers vs capitalists)
The Ricardo-Viner Model (the specific factors model) - correct answer ✔✔Factors immobile.
Both factors can win, Industries with a comparative advantage ( exporting industries) will win in this
model, due to increasing demand
Import competing industries struggle, because of decreasing demand.
Sector based cleavages
Rogowski's (1987) three factors model - correct answer ✔✔Three factors: capital, labor, and land.
Class based cleavages (due to income gap)
Rogowski square - correct answer ✔✔Advanced Economies: Abundant in capital
Backward economies: Scarce in capital
High land-labor ratio: Abundant in land, scarce in labor
Low land-labor ratio: Scarce in land, abundant in labor
Hiscox - correct answer ✔✔changes in levels of inter-industry factor mobility account for variation in
coalition/cleavage patterns.
High inter-industry factor mobility: cleavages in class lines
low inter-industry factor mobility, cleavages in line with industries
answers A+ rated (7)
What's opportunity cost? - correct answer ✔✔The amount of the good or service that is sacrificed in
order to produce another good or service
How to calculate opportunity cost? - correct answer ✔✔40 Shirts or 30 computers. 1 shirt= 30/40 (3/4)
((.75)) computers.
How comparative advantage defined? - correct answer ✔✔Country has comparative advantage in
whichever good it has a lower opportunity cost compared to others
Production possibility frontier - correct answer ✔✔Any economy has limited resources
To produce more of one good, the economy must sacrifice some production of another good
As you produce more computers, you produce less shirts
Consumption indifference curves - correct answer ✔✔Given budget constraint, consumers will acquire
goods (e.g., shirts & computers) in the combination to maximize their collective utility.
Shows different combinations of goods (e.g., shirts & computers) between which a consumer is
indifferent.
The Stolper-Samuelson Theorem (the factor endowment model) - correct answer ✔✔Abundant factor
owners always win from free trade, scarce factor owners always lose from free trade
Due to price changes and factor's ability to move to different industry.
, The Stolper-Samuelson Theorem Implications: - correct answer ✔✔class-based political cleavages
(Laborers vs capitalists)
The Ricardo-Viner Model (the specific factors model) - correct answer ✔✔Factors immobile.
Both factors can win, Industries with a comparative advantage ( exporting industries) will win in this
model, due to increasing demand
Import competing industries struggle, because of decreasing demand.
Sector based cleavages
Rogowski's (1987) three factors model - correct answer ✔✔Three factors: capital, labor, and land.
Class based cleavages (due to income gap)
Rogowski square - correct answer ✔✔Advanced Economies: Abundant in capital
Backward economies: Scarce in capital
High land-labor ratio: Abundant in land, scarce in labor
Low land-labor ratio: Scarce in land, abundant in labor
Hiscox - correct answer ✔✔changes in levels of inter-industry factor mobility account for variation in
coalition/cleavage patterns.
High inter-industry factor mobility: cleavages in class lines
low inter-industry factor mobility, cleavages in line with industries
