Question 1

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country B,the trade-off to making one tomato is:

Accepted Answer

A)   2 bananas.
B)   3 bananas.
C)   4 bananas.
D)   5 bananas.E) All of the above
F) None of the above

Question 2

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Assuming both countries have the same amount of resources available to them,which of the following statements is true? Country A has:

Accepted Answer

A)  an absolute advantage in the production of cars,and Country B has the absolute advantage in the production of trucks.
B)  an absolute advantage in the production of trucks,and Country B has the absolute advantage in the production of cars.
C)  the absolute advantage in the production of both cars and trucks.
D)  the absolute advantage in neither the production of cars nor trucks.E) All of the above
F) None of the above

Question 3

If society were to experience an increase in its available resources its production possibilities frontier would:

Accepted Answer

A)   shift out.
B)   shift in.
C)   not move.
D)   become convex.E) B) and C)
F) A) and D)

Question 4

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country A is:

Accepted Answer

A)  30 cars.
B)  6 trucks.
C)  5 cars.
D)  3 cars.E) None of the above
F) All of the above

Question 5

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

Accepted Answer

A)   10 bushels of apples.
B)   20 bushels of apples.
C)   30 bushels of apples.
D)   40 bushels of apples.E) B) and C)
F) C) and D)

Question 6

Suppose an American worker can make 100 chairs or catch 1000 fish per day.On the other hand,a Chilean worker can produce 40 chairs or catch 400 fish per day.The United States possesses a(n) _______________ advantage in chair production,but not a(n) ______________ advantage in fish production.

Accepted Answer

A)   absolute; comparative
B)   comparative; absolute
C)   absolute; absolute
D)   comparative; comparativeE) A) and B)
F) None of the above

Question 7

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country B has the _______________ advantage in the production of tablets,which means they should specialize in __________________.

Accepted Answer

A)   comparative; tablets
B)   absolute; tablets
C)   comparative; iPods
D)   absolute; iPodsE) A) and D)
F) A) and C)

Question 8

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Which of the following is true? The opportunity cost of:

Accepted Answer

A)  1 iPod in Country A is 2 tablets.
B)  1 tablet in Country A is 2 iPods.
C)  tablets is lower in Country A than Country B.
D)  1 iPod in Country B is 2 tablets.E) A) and D)
F) B) and C)

Question 9

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.Because Tom has a ____________ opportunity cost for one fence compared to Jerry,we know Tom has _________________________.

Accepted Answer

A)   higher; the comparative advantage in fence production
B)   lower; the comparative advantage in fence production
C)   similar; no advantage in production of either good
D)   higher; the comparative advantage in dish productionE) A) and D)
F) B) and C)

Question 10

The concepts of comparative advantage,specialization,and trade form a compelling argument in favor of:

Accepted Answer

A)   free trade.
B)   protectionism.
C)   self-sufficiency.
D)   only exporting goods and not importing goods.E) A) and B)
F) A) and C)

Question 11

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.For Jerry,the opportunity cost of building a fence is ________ dishes made.

Accepted Answer

A)   14
B)   7
C)   4
D)   2E) A) and C)
F) A) and B)

Question 12

Consider the production possibilities frontier displayed in the figure shown.A society faced with this curve could choose to produce:

Accepted Answer

A)  A,B,or D.
B)  A,B,or C.
C)  A,D,or C.
D)  B,C,or D.E) All of the above
F) C) and D)

Question 13

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.At the end of the day,Jerry could have produced:

Accepted Answer

A)   14 dishes and 7 fences.
B)   12 dishes and 6 fences.
C)   10 dishes and 5 fences.
D)   6 dishes and 4 fences.E) A) and D)
F) All of the above

Question 14

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is:
A.12 cars.
B.4 trucks.
C.1.5 cars
D.3 cars.

Accepted Answer

A)  measures the opportunity cost of trucks in terms of cars.
B)  measures the trade-off that Country A face when deciding how to allocate resources.
C)  is constant because the opportunity cost remains constant.
D)  All of these statements are true.E) A) and D)
F) A) and C)

Question 15

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.At the end of the day,if Jerry was efficient with his resources,he could have produced:

Accepted Answer

A)   12 dishes and 0 fences.
B)   10 dishes and 2 fences.
C)   8 dishes and 2 fences.
D)   6 dishes and 2 fences.E) All of the above
F) A) and D)

Question 16

An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

Accepted Answer

A)   shift in.
B)   shift out.
C)   not move until society chooses to move it.
D)   become more meaningful in policy decisions.E) None of the above
F) A) and C)

Question 17

Suppose that,given the same number of workers,the United States can produce five times as many computers or 10 times as many airplanes as Mexico.Which of the following statements is true?

Accepted Answer

A)   The United States has an absolute advantage in the production of computers, and Mexico has an absolute advantage in the production of airplanes.
B)   The United States has an absolute advantage in the production of airplanes, and Mexico has an absolute advantage in the production of computers.
C)   The United States has an absolute advantage in the production of both airplanes and computers.
D)   Mexico has an absolute advantage in the production of both airplanes and computers.E) A) and D)
F) All of the above

Question 18

Suppose that only two goods are produced in an economy.If a country possesses the comparative advantage in the production of one good then it:

Accepted Answer

A)   must also possess the comparative advantage in the production of the other good.
B)   must also possess the absolute advantage in the production of that good.
C)   cannot also possess the comparative advantage in the production of the other good.
D)   cannot also possess the absolute advantage in the production of that good.E) A) and D)
F) C) and D)

Question 19

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 the comparative advantage in corn production.
C)   Iowa should export corn to Ohio.
D)   Ohio has the comparative advantage in corn production.E) All of the above
F) None of the above

Question 20

Suppose England has a comparative advantage over the United States in producing tea.If this is true,then:

Accepted Answer

A)   England should produce more tea than it wants and sell the rest to the United States.
B)   England should produce a small amount of tea and buy the rest of the tea it wants from the United States.
C)   England should not produce tea, and should instead buy it all from the United States.
D)   the United States has nothing to gain from buying tea from England.E) A) and B)
F) A) and C)

Exam 2: Specialization and Exchange

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

Correct Answer
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If society were to experience an increase in its available resources its production possibilities frontier would:

Correct Answer
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Correct Answer
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Suppose an American worker can make 100 chairs or catch 1000 fish per day.On the other hand,a Chilean worker can produce 40 chairs or catch 400 fish per day.The United States possesses a(n) _ advantage in chair production,but not a(n) advantage in fish production.

Correct Answer
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Correct Answer
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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Which of the following is true? The opportunity cost of:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown.A society faced with this curve could choose to produce:

Correct Answer
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Suppose England has a comparative advantage over the United States in producing tea.If this is true,then:

Correct Answer
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An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

Correct Answer
verified

Correct Answer
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Correct Answer
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The concepts of comparative advantage,specialization,and trade form a compelling argument in favor of:

Correct Answer
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country B,the trade-off to making one tomato is:

Correct Answer
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Suppose that,given the same number of workers,the United States can produce five times as many computers or 10 times as many airplanes as Mexico.Which of the following statements is true?

Correct Answer
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Correct Answer
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Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is: A.12 cars. B.4 trucks. C.1.5 cars D.3 cars.

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

Correct Answer
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Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country A is:

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

Correct Answer
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Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Assuming both countries have the same amount of resources available to them,which of the following statements is true? Country A has:

Correct Answer
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Exam 2: Specialization and Exchange

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

Correct AnswerverifiedShow Answer

If society were to experience an increase in its available resources its production possibilities frontier would:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 chairs or catch 1000 fish per day.On the other hand,a Chilean worker can produce 40 chairs or catch 400 fish per day.The United States possesses a(n) _______________ advantage in chair production,but not a(n) ______________ advantage in fish production.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Which of the following is true? The opportunity cost of:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown.A society faced with this curve could choose to produce:

Correct AnswerverifiedShow Answer

Suppose England has a comparative advantage over the United States in producing tea.If this is true,then:

Correct AnswerverifiedShow Answer

An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The concepts of comparative advantage,specialization,and trade form a compelling argument in favor of:

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country B,the trade-off to making one tomato is:

Correct AnswerverifiedShow Answer

Suppose that,given the same number of workers,the United States can produce five times as many computers or 10 times as many airplanes as Mexico.Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is: A.12 cars. B.4 trucks. C.1.5 cars D.3 cars.

Correct AnswerverifiedShow Answer

Suppose that only two goods are produced in an economy.If a country possesses the comparative advantage in the production of one good then it:

Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country A is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Assuming both countries have the same amount of resources available to them,which of the following statements is true? Country A has:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Suppose an American worker can make 100 chairs or catch 1000 fish per day.On the other hand,a Chilean worker can produce 40 chairs or catch 400 fish per day.The United States possesses a(n) _ advantage in chair production,but not a(n) advantage in fish production.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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