Question 1

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. A bundle of goods that Country A could potentially make would be:

Accepted Answer

A)   (500 iPhones, 500 iPads) .
B)   (500 iPhones, 400 iPads) .
C)   (500 iPhones, 300 iPads) .
D)   (500 iPhones, 200 iPads) .E) All of the above
F) A) and B)

Question 2

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 A, the trade-off of making one tomato is:

Accepted Answer

A)   2 bananas.
B)   3 bananas.
C)   4 bananas.
D)   5 bananas.E) B) and C)
F) All of the above

Question 3

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

Accepted Answer

A)   400 bushels of apples, 20 watermelons
B)   100 bushels of apples, 15 watermelons
C)   150 bushels of apples, 10 watermelons
D)   400 bushels of apples, 0 watermelonsE) B) and C)
F) None of the above

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. For Tom, the opportunity cost of building a table is _______ chairs made.

Accepted Answer

A)   16
B)   12
C)   8
D)   4E) A) and D)
F) None of the above

Question 5

Which of the following statements about absolute and comparative advantage is not true?

Accepted Answer

A)   If a country has a comparative advantage at producing a good, it can have an absolute advantage at producing another good.
B)   If a country has an absolute advantage at producing a good, it can also have a comparative advantage at producing that good.
C)   A country may have an absolute advantage at producing all goods.
D)   A country may have a comparative advantage at producing all goods.E) B) and C)
F) None of the above

Question 6

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n)  _____ advantage at producing nets, but does not have a(n)  _____ advantage at producing fish.

Accepted Answer

A)   absolute; comparative
B)   comparative; absolute
C)   absolute; absolute
D)   comparative; comparativeE) A) and C)
F) All of the above

Question 7

When a producer has a comparative advantage at producing a good, it means the producer:

Accepted Answer

A)   can produce more of that good than others with the same number of workers.
B)   has the ability to produce the good at a lower opportunity cost than others.
C)   has no reason to trade with others.
D)   is efficient in production.E) B) and D)
F) All of the above

Question 8

When two countries specialize and trade with one another, total production:

Accepted Answer

A)   remains unchanged, but consumption rises.
B)   increases, but only if a comparative advantage exists.
C)   may increase, depending on trade relations.
D)   remains unchanged, as does consumption.E) B) and D)
F) All of the above

Question 9

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 B would be using resources efficiently if it was producing:

Accepted Answer

A)   (200 iPhones, 1,750 iPads) .
B)   (200 iPhones, 1,500 iPads) .
C)   (200 iPhones, 1,000 iPads) .
D)   (200 iPhones, 750 iPads) .E) None of the above
F) C) and D)

Question 10

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. Based on their production possibilities frontiers, Tom and Jerry:

Accepted Answer

A)   can both benefit from trade because absolute advantage exists.
B)   can both benefit from trade because comparative advantage exists.
C)   cannot benefit from trade because Tom has an absolute advantage at producing both goods.
D)   will decide not to trade because no comparative advantage exists.E) A) and D)
F) None of the above

Question 11

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true regarding Country A's opportunity cost of a t-shirt?

Accepted Answer

A)   It is lower than that of Country B, so Country A should specialize in t-shirts and trade for avocados.
B)   It is higher than that of Country B, so Country A should specialize in avocados and trade for t-shirts.
C)   It is higher than that of Country B for both goods, so Country A will not benefit from trade.
D)   It is lower than that of Country B for both goods, so Country A will not benefit from trade.E) A) and C)
F) B) and C)

Question 12

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

Accepted Answer

A)   shift inward.
B)   shift outward.
C)   remain the same.
D)   shift inward, then shift outward.E) A) and D)
F) All of the above

Question 13

Consider the production possibilities frontier in the figure shown. The opportunity cost of one cigar between points A and B is:

Accepted Answer

A)   1/5 car.
B)   20 cars.
C)   5 cars.
D)   10 cars.E) C) and D)
F) None of the above

Question 14

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?

Accepted Answer

A)   Country A has an absolute advantage at producing cars, and Country B has an absolute advantage at producing trucks.
B)   Country A has an absolute advantage at producing trucks and Country B has an absolute advantage at producing cars.
C)   Country A has an absolute advantage at producing both cars and trucks.
D)   Country B has an absolute advantage at producing both cars and trucks.E) None of the above
F) B) and C)

Question 15

1 to PPF2? A)  More workers B)  Better printing press technology C)  A desire to read more books D)  Better sewing technology" class="answers-bank-image d-inline" rel="preload" > Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF1 to PPF2?

Accepted Answer

A)   More workers
B)   Better printing press technology
C)   A desire to read more books
D)   Better sewing technologyE) A) and B)
F) B) and C)

Question 16

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) B) and C)
F) A) and B)

Question 17

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Accepted Answer

A)   Producing at point I is the best choice because both books and pizzas are made.
B)   Producing at point IV would be inefficient because no books would be produced.
C)   Producing at point III is the best choice because it's closest to the middle of the line.
D)   Producing at point II is impossible.E) A) and B)
F) A) and C)

Question 18

Suppose that a worker in Country A can make either 15 cars or 5 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 4 cars or 20 computers each year. Country B has 600 workers. A bundle of goods that Country B could potentially make would be:

Accepted Answer

A)   (2,400 cars, 12,000 computers) .
B)   (2,400 cars, 4,000 computers) .
C)   (1,400 cars, 6,000 computers) .
D)   (1,200 cars, 6,000 computers) .E) A) and B)
F) A) and C)

Question 19

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to give 4 TVs to Country A for every cellphone it receives. Assuming Country A fully specializes in cellphone production and that it wishes to consume 24 cellphones total, how many TVs can Country A consume after trade?

Accepted Answer

A)   30 TVs
B)   48 TVs
C)   96 TVs
D)   28 TVsE) B) and D)
F) B) and C)

Question 20

If a country has an absolute advantage at producing one good, which of the following is true?

Accepted Answer

A)   It cannot have an absolute advantage at producing the other good.
B)   It must also have a comparative advantage at producing both goods.
C)   It can produce more of that good than the other good.
D)   It can produce more of that good given the same resources.E) None of the above
F) A) and B)

Exam 2: Specializationand Exchange

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 A, the trade-off of making one tomato is:

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 regarding Country A's opportunity cost of a t-shirt?

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

Correct Answer
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If a country has an absolute advantage at producing one good, which of the following is true?

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

Correct Answer
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Correct Answer
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Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _ advantage at producing nets, but does not have a(n) _ advantage at producing fish.

Correct Answer
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Correct Answer
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Suppose that a worker in Country A can make either 15 cars or 5 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 4 cars or 20 computers each year. Country B has 600 workers. A bundle of goods that Country B could potentially make would be:

Correct Answer
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Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₁ to PPF₂?

Correct Answer
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Which of the following statements about absolute and comparative advantage is not true?

Correct Answer
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When two countries specialize and trade with one another, total production:

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 B would be using resources efficiently if it was producing:

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. A bundle of goods that Country A could potentially make would be:

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
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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?

Correct Answer
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Consider the production possibilities frontier in the figure shown. The opportunity cost of one cigar between points A and B is:

Correct Answer
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When a producer has a comparative advantage at producing a good, it means the producer:

Correct Answer
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Exam 2: Specializationand Exchange

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 A, the trade-off of making one tomato is:

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 regarding Country A's opportunity cost of a t-shirt?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

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If a country has an absolute advantage at producing one good, which of the following is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _____ advantage at producing nets, but does not have a(n) _____ advantage at producing fish.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 15 cars or 5 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 4 cars or 20 computers each year. Country B has 600 workers. A bundle of goods that Country B could potentially make would be:

Correct AnswerverifiedShow Answer

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF1 to PPF2?

Correct AnswerverifiedShow Answer

Which of the following statements about absolute and comparative advantage is not true?

Correct AnswerverifiedShow Answer

When two countries specialize and trade with one another, total production:

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 B would be using resources efficiently if it was producing:

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. A bundle of goods that Country A could potentially make would be:

Correct AnswerverifiedShow Answer

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

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?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown. The opportunity cost of one cigar between points A and B is:

Correct AnswerverifiedShow Answer

When a producer has a comparative advantage at producing a good, it means the producer:

Correct AnswerverifiedShow Answer

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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Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _ advantage at producing nets, but does not have a(n) _ advantage at producing fish.

Correct Answer
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Correct Answer
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Correct Answer
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Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₁ to PPF₂?

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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