Question 1

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

Accepted Answer

A)  I, II, or IV.
B)  I, II, or III.
C)  I, IV, or III.
D)  II, III, or IV.E) A) and C)
F) A) and D)

Question 2

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) All of the above
F) A) and C)

Question 3

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. Suppose Country B's population of workers increased to 600. Which of the following statements is now true?

Accepted Answer

A)  Country B's production possibilities frontier has rotated outward for only the production of iPhones.
B)  Country B's production possibilities frontier has shifted straight outward.
C)  Country B's production possibilities frontier has shifted straight inward.
D)  Country B's production possibilities are now more limited due to overcrowding from the extra workers.E) B) and C)
F) A) and D)

Question 4

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) None of the above
F) B) and D)

Question 5

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) B) and D)
F) A) and B)

Question 6

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 Canada is:

Accepted Answer

A)  2 apples for each pair of shoes.
B)  2 pairs of shoes for each apple.
C)  ½ apple for each pair of shoes.
D)  ½ pair of shoes for every 2 apples.E) B) and D)
F) C) and D)

Question 7

Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Accepted Answer

A)  decreases.
B)  stays the same.
C)  increases.
D)  decreases then increases.E) A) and B)
F) B) and D)

Question 8

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. The opportunity cost of building one table is _____ for Tom and _____ for Jerry. Therefore, Tom should specialize in _____.

Accepted Answer

A)  4 chairs; 2 chairs; chairs
B)  16 chairs; 14 chairs; chairs
C)  4 chairs; 2 chairs; tables
D)  16 chairs; 14 chairs; tablesE) B) and D)
F) A) and D)

Question 9

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. The opportunity cost of one tomato is:

Accepted Answer

A)  lower in Country A than Country B.
B)  higher in Country A than Country B.
C)  the same in both countries.
D)  impossible to calculate without more information.E) B) and C)
F) A) and D)

Question 10

1 to PPF 3? 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 PPF 1 to PPF 3?

Accepted Answer

A)  More workers
B)  Better printing press technology
C)  A desire to read more books
D)  Better sewing technologyE) C) and D)
F) None of the above

Question 11

When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:

Accepted Answer

A)  has an absolute advantage at producing that good.
B)  has a comparative advantage at producing that good.
C)  has no reason to trade with others.
D)  is efficient in production.E) A) and C)
F) B) and C)

Question 12

Suppose an American worker can make 100 nets or catch 900 fish per day. On the other hand, a Chilean worker, can make 40 nets or catch 400 fish per day. The United States has an absolute advantage at producing both fish and nets. This means that the United States:

Accepted Answer

A)  should produce only nets and trade with Chile to get fish.
B)  should produce only fish and trade with Chile to get nets.
C)  should take advantage of Chile by trading with them.
D)  same amount of workers" to read "same number of workers.E) B) and C)
F) None of the above

Question 13

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

Question 14

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. Which of the following is true?

Accepted Answer

A)  In Country A, the opportunity cost of one iPhone is two iPads.
B)  In Country A, the opportunity cost of one iPad is two iPhones.
C)  The opportunity cost of iPads is lower in Country A than in Country B.
D)  In Country B, the opportunity cost of one iPhone is two iPads.E) A) and B)
F) C) and D)

Question 15

When a country is producing goods and services efficiently it:

Accepted Answer

A)  is producing at a point on or below its production possibilities frontier.
B)  is getting the most output by using all its available resources.
C)  is trading with other countries.
D)  is able to reach a point beyond its production possibilities frontier.E) A) and D)
F) A) and C)

Question 16

People will choose to specialize and trade if they can acquire the goods they want:

Accepted Answer

A)  at a lower cost than making the goods themselves.
B)  at a higher cost than making the goods themselves.
C)  from someone who is willing to trade with them.
D)  from a capitalistic system of exchange.E) None of the above
F) B) and C)

Question 17

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. If Country A were to divide its resources equally, it could produce:

Accepted Answer

A)  30 cars and 6 trucks.
B)  25 cars and 5 trucks.
C)  15 cars and 3 trucks.
D)  10 cars and 4 trucks.E) B) and C)
F) A) and B)

Question 18

Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Accepted Answer

A)  decreases.
B)  stays the same.
C)  increases.
D)  decreases then increases.E) B) and C)
F) All of the above

Question 19

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

Accepted Answer

A)  Country A should specialize in cars, Country B should specialize in trucks, and both could benefit from trade.
B)  Country A should specialize in trucks, Country B should specialize in cars, and both will benefit from trade.
C)  Country A will not benefit from trade.
D)  Country B will lose by trading with Country A.E) A) and B)
F) C) and D)

Question 20

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Accepted Answer

A)  Country A has a comparative advantage at producing cars.
B)  Country A has a comparative advantage at producing trucks.
C)  Country A has a comparative advantage at producing both cars and trucks.
D)  Country B has a comparative advantage at producing both cars and trucks.E) All of the above
F) A) and B)

Exam 2: Specialization and Exchange

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 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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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 PPF ₁ to PPF ₃?

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

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 Canada 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?

Correct Answer
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When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:

Correct Answer
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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. The opportunity cost of one tomato is:

Correct Answer
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Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Correct Answer
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Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Correct Answer
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When a country is producing goods and services efficiently it:

Correct Answer
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Correct Answer
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People will choose to specialize and trade if they can acquire the goods they want:

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. Which of the following is true?

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?

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. If Country A were to divide its resources equally, it could produce:

Correct Answer
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Correct Answer
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Suppose an American worker can make 100 nets or catch 900 fish per day. On the other hand, a Chilean worker, can make 40 nets or catch 400 fish per day. The United States has an absolute advantage at producing both fish and nets. This means that the United States:

Correct Answer
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Exam 2: Specialization and Exchange

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

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

Correct AnswerverifiedShow Answer

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 PPF 1 to PPF 3?

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

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 Canada 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?

Correct AnswerverifiedShow Answer

When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:

Correct AnswerverifiedShow Answer

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. The opportunity cost of one tomato is:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Correct AnswerverifiedShow Answer

When a country is producing goods and services efficiently it:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

People will choose to specialize and trade if they can acquire the goods they want:

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. Which of the following is true?

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?

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. If Country A were to divide its resources equally, it could produce:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 nets or catch 900 fish per day. On the other hand, a Chilean worker, can make 40 nets or catch 400 fish per day. The United States has an absolute advantage at producing both fish and nets. This means that the United States:

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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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 PPF ₁ to PPF ₃?

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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