Question 1

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf between points C and D is:

Accepted Answer

A)  1 sweater.
B)  20 sweaters.
C)  10 sweaters
D)  2 sweaters.E) C) and D)
F) A) and D)

Question 2

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Accepted Answer

A)  5 apples for each pair of shoes.
B)  5 pairs of shoes for each apple.
C)  1/55 apple for each pair of shoes.
D)  1 pair of shoes for every 2 apples.E) C) and D)
F) A) and C)

Question 3

Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Accepted Answer

A)  (15 airplanes, 15 trucks) 
B)  (20 airplanes, 40 trucks) 
C)  (10 airplanes, 30 trucks) 
D)  (5 airplanes, 30 trucks) E) B) and D)
F) A) and D)

Question 4

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Tom divides his time evenly between activities and acts efficiently, he will produce:

Accepted Answer

A)  16 chairs and 4 tables.
B)  12 chairs and 3 tables.
C)  8 chairs and 2 tables.
D)  4 chairs and 3 tables.E) None of the above
F) All of the above

Question 5

If Spain is capable of producing tapas, soccer balls, or some combination of those two, then it should:

Accepted Answer

A)  produce the good it has an absolute advantage at producing.
B)  produce the good it has a comparative advantage at producing.
C)  remain self-sufficient, as long as it can produce both efficiently.
D)  trade only if it has an absolute advantage at producing both goods.E) A) and B)
F) A) and C)

Question 6

If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:

Accepted Answer

A)  Iowa should specialize in corn production.
B)  Iowa has a comparative advantage at producing corn.
C)  Iowa should export corn to Ohio.
D)  Ohio has a comparative advantage at producing corn.E) A) and B)
F) B) and C)

Question 7

Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Accepted Answer

A)  IV
B)  III
C)  II
D)  IE) A) and C)
F) All of the above

Question 8

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to trade four trucks for every airplane. Assuming Country A specializes in airplane production, which of the following combinations of goods could Country A consume?

Accepted Answer

A)  (15 airplanes, 20 trucks) 
B)  (10 airplanes, 20 trucks) 
C)  (10 airplanes, 30 trucks) 
D)  (5 airplanes, 20 trucks) E) A) and B)
F) B) and C)

Question 9

The slope of a production possibilities frontier measures:

Accepted Answer

A)  the opportunity cost of producing one good in terms of the other.
B)  the trade-off in the consumption of one good versus the other.
C)  how much of the resources must be used in order to produce one the goods.
D)  the inefficient production of a good.E) A) and C)
F) None of the above

Question 10

Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Accepted Answer

A)  must also possess a comparative advantage at producing the other good.
B)  must also possess an absolute advantage at producing that good.
C)  cannot also possess a comparative advantage at producing the other good.
D)  cannot also possess an absolute advantage at producing that good.E) None of the above
F) B) and D)

Question 11

When nations trade, the result would most likely be a(n) :

Accepted Answer

A)  increase in total production, which would benefit every nation involved.
B)  increase in total production, which would benefit only the wealthiest nations.
C)  decrease in total production, which would benefit only the wealthiest nations.
D)  decrease in total production, which would benefit countries that do not have an absolute advantage.E) All of the above
F) B) and C)

Question 12

The United States and Canada trade hockey skates and apple pie. If the United States has an absolute and a comparative advantage at producing apple pie, then:

Accepted Answer

A)  Canada must have a comparative advantage at producing skates.
B)  Canada must have an absolute advantage at producing skates.
C)  Canada must have an absolute and a comparative advantage at producing skates.
D)  the United States must also have a comparative advantage at producing skates.E) B) and C)
F) None of the above

Question 13

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A would be using resources efficiently if it was producing:

Accepted Answer

A)  (500 iPhones, 100 iPads) .
B)  (500 iPhones, 150 iPads) .
C)  (500 iPhones, 200 iPads) .
D)  (500 iPhones, 250 iPads) .E) A) and B)
F) All of the above

Question 14

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve currently:

Accepted Answer

A)  cannot obtain point II.
B)  can only obtain point III.
C)  can only obtain point IV or point I.
D)  cannot obtain point III.E) A) and D)
F) A) and C)

Question 15

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon:

Accepted Answer

A)  will decrease as more watermelons are produced.
B)  is constant.
C)  will increase as more watermelons are produced.
D)  is zero at point C.E) B) and C)
F) A) and C)

Question 16

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Accepted Answer

A)  lower for the United States than Bangladesh, therefore the United States has a comparative advantage at producing gloves.
B)  higher for the United States than Bangladesh, therefore the United States has a comparative advantage at producing radishes.
C)  the same for both the United States and Bangladesh, therefore neither country has a comparative advantage at producing gloves.
D)  the same for both the United States and Bangladesh, therefore both countries have a comparative advantage at producing gloves.E) A) and B)
F) A) and C)

Question 17

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. After looking at the production possibilities for both Tom and Jerry, what can we conclude?

Accepted Answer

A)  Tom has a comparative advantage at producing chairs.
B)  Jerry has a comparative advantage at producing chairs.
C)  Tom has a comparative advantage at producing tables.
D)  Neither Tom nor Jerry has a comparative advantage at producing either good.E) All of the above
F) A) and B)

Question 18

A production possibilities frontier is a line or curve that:

Accepted Answer

A)  shows all the possible combinations of outputs that can be produced using all available resources.
B)  shows what should be produced when all available resources are efficiently used.
C)  shows the best combinations of outputs that can be produced using all available resources.
D)  explains why societies make the choices they do.E) C) and D)
F) None of the above

Question 19

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. For Jerry, the opportunity cost of building a table is _____ chairs made.

Accepted Answer

A)  14
B)  7
C)  4
D)  2E) None of the above
F) B) and C)

Question 20

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Country A specializes in producing bananas and Country B specializes in producing tomatoes. Regarding the terms of trade, Country A will give no _____ than _____ for every _____.

Accepted Answer

A)  more; 5 bananas; one tomato
B)  less; 5 bananas; one tomato
C)  more; 1 tomato; 5 bananas
D)  less; 1 tomato; 5 bananasE) B) and C)
F) A) and D)

Exam 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Correct Answer
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The United States and Canada trade hockey skates and apple pie. If the United States has an absolute and a comparative advantage at producing apple pie, then:

Correct Answer
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Correct Answer
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Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A would be using resources efficiently if it was producing:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve currently:

Correct Answer
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Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf between points C and D is:

Correct Answer
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Correct Answer
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The slope of a production possibilities frontier measures:

Correct Answer
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Correct Answer
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Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Correct Answer
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If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:

Correct Answer
verified

A production possibilities frontier is a line or curve that:

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon:

Correct Answer
verified

Correct Answer
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Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Correct Answer
verified

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to trade four trucks for every airplane. Assuming Country A specializes in airplane production, which of the following combinations of goods could Country A consume?

Correct Answer
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Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Correct Answer
verified

If Spain is capable of producing tapas, soccer balls, or some combination of those two, then it should:

Correct Answer
verified

When nations trade, the result would most likely be a(n) :

Correct Answer
verified

Exam 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. The opportunity cost of one pair of gloves is:

Correct AnswerverifiedShow Answer

The United States and Canada trade hockey skates and apple pie. If the United States has an absolute and a comparative advantage at producing apple pie, then:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A would be using resources efficiently if it was producing:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve currently:

Correct AnswerverifiedShow Answer

Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf between points C and D is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The slope of a production possibilities frontier measures:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Correct AnswerverifiedShow Answer

If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:

Correct AnswerverifiedShow Answer

A production possibilities frontier is a line or curve that:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that only two goods are produced in an economy. If a country possesses a comparative advantage at producing one good, then it:

Correct AnswerverifiedShow Answer

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to trade four trucks for every airplane. Assuming Country A specializes in airplane production, which of the following combinations of goods could Country A consume?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Correct AnswerverifiedShow Answer

If Spain is capable of producing tapas, soccer balls, or some combination of those two, then it should:

Correct AnswerverifiedShow Answer

When nations trade, the result would most likely be a(n) :

Correct AnswerverifiedShow Answer

Correct Answer
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