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.Two possible consumption bundles that Country A could produce are:

Accepted Answer

A)   (5,000 bananas, 1,000 tomatoes)  and (1,000 bananas, 5,000 tomatoes) 
B)   (5,000 bananas, 0 tomatoes)  and (2,500 bananas, 500 tomatoes) 
C)   (2,500 bananas, 500 tomatoes)  and (1,250 bananas, 800 tomatoes) 
D)   (2,500 bananas, 750 tomatoes)  and (1,250 bananas, 750 tomatoes) E) C) and D)
F) None of the above

Question 2

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.Jerry has a comparative advantage in:

Accepted Answer

A)   dish production because he has the lower opportunity cost of a dishes.
B)   dish production because he has the higher opportunity cost of a dishes.
C)   fence production because he has the lower opportunity cost of a fence.
D)   fence production because he has the higher opportunity cost of a fence.E) A) and C)
F) C) and D)

Question 3

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 of one pair of shoes for the United States is _______,while the opportunity cost of one pair of shoes for Canada is _________.

Accepted Answer

A)   5 apples; 2 apples
B)   1/5 apple; Â½ apple
C)   2,000 apples; 200 apples
D)   100 apples; 20 applesE) A) and B)
F) A) and C)

Question 4

If we consider the reality that each worker has different skills,then the production possibilities frontier would:

Accepted Answer

A)   have a convex shape.
B)   have a concave shape.
C)   be a straight line.
D)   shift outward.E) All of the above
F) B) and C)

Question 5

Which of the following statements about trade is true?

Accepted Answer

A)   Trade involves a winner and a loser.
B)   Trade often hurts both parties in the long run.
C)   Trade is a zero sum proposition.
D)   Trade can benefit both parties.E) A) and D)
F) None of the above

Question 6

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.If Tom divides his time evenly between activities and acts efficiently,he will produce:

Accepted Answer

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

Question 7

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,Tom could have:

Accepted Answer

A)   (16 dishes, 4 fences)  or (8 dishes, 2 fences) .
B)   (8 dishes, 2 fences) , or (4 dishes, 6 fences) .
C)   (8 dishes, 2 fences) , or (4 dishes, 3 fences) .
D)   (12 dishes, 3 fences) , or (8 dishes, 3 fences) .E) C) and D)
F) B) and D)

Question 8

People often choose to specialize and trade because:

Accepted Answer

A)   it will allow them to enjoy more goods than they can create on their own.
B)   they can consume a bundle of goods on their production possibilities frontier.
C)   it always allows them to produce at a point beyond their own production possibilities frontier.
D)   they can take advantage of another nation's poor choices.E) B) and C)
F) A) and C)

Question 9

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.Canada has the ____________ opportunity cost of a pair of shoes than the United States,so: ____________.

Accepted Answer

A)   higher; Canada should specialize in shoe production
B)   lower; Canada should specialize in apple production
C)   higher; Canada should specialize in apple production
D)   lower; Canada should specialize in shoe productionE) All of the above
F) B) and D)

Question 10

Suppose an American worker can make 100 chairs or catch 1,000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.Which of the following statements is true?

Accepted Answer

A)   The United States has the comparative advantage in chair production.
B)   Chile has the comparative advantage in chair production.
C)   Both the United States and Chile have a comparative advantage in chair production.
D)   Neither the United States nor Chile has a comparative advantage in chair production.E) A) and B)
F) A) and C)

Question 11

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 curves in the figure shown.What 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 C)
F) A) and D)

Question 12

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?

Accepted Answer

A)   Country B should produce tablets and Country A should produce iPods, and they could benefit from trade.
B)   Country B should produce iPods and Country A should produce tablets, and they could benefit from trade.
C)   Neither country can benefit from trade since no comparative advantage exists.
D)   Because Country B has the absolute advantage in producing tablets, they should specialize in the production of tablets.E) None of the above
F) A) and B)

Question 13

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Country A has the comparative advantage in:

Accepted Answer

A)  cars and Country B has the comparative advantage in trucks.
B)  trucks and Country B has the comparative advantage in cars.
C)  cars and trucks.
D)  neither cars nor trucks.E) B) and C)
F) A) and D)

Question 14

When a producer is operating efficiently it is producing:

Accepted Answer

A)   at a point on its production possibilities frontier.
B)   at a point on or under its production possibilities frontier.
C)   only one good.
D)   the good in which it has an absolute advantage.E) A) and C)
F) None of the above

Question 15

3 to PPF1? A)  A tornado B)  More workers C)  A desire to read lessbooks D)  Better sewing technology" class="answers-bank-image d-inline" rel="preload" > Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF3 to PPF1?

Accepted Answer

A)   A tornado
B)   More workers
C)   A desire to read lessbooks
D)   Better sewing technologyE) All of the above
F) B) and C)

Question 16

We say that a country completely specializes in production when it spends all of its resources producing:

Accepted Answer

A)   a particular good.
B)   those goods it has an absolute advantage in producing.
C)   only what other countries need.
D)   what it can make more of than anyone else.E) A) and B)
F) A) and C)

Question 17

The slope of a production possibilities frontier measures:

Accepted Answer

A)   the opportunity cost of producing one good in terms of the other good.
B)   the trade-off in the consumption of one good versus the other good
C)   how much of the resources must be used in order to produce one the goods.
D)   inefficient production of a good.E) B) and C)
F) All of the above

Question 18

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

Accepted Answer

A)   at a lower cost than it would cost them to make the goods themselves.
B)   at a higher cost than it would cost them to make the goods themselves.
C)   from someone who is willing to trade with them.
D)   from a capitalistic system of exchange.E) A) and B)
F) All of the above

Question 19

Consider the production possibilities frontier displayed in the figure shown.If this society chooses to produce 200 bushels of apples it can produce no more than:

Accepted Answer

A)   20 watermelons.
B)   15 watermelons.
C)   10 watermelons.
D)   5 watermelons.E) B) and D)
F) C) and D)

Question 20

Consider the production possibilities frontier in the figure shown.The opportunity cost of cars when moving from point B to point C:

Accepted Answer

A)  is greater than the opportunity cost of cars when moving from point A to point B.
B)  is less than the opportunity cost of cars when moving from point A to point B.
C)  is greater than the opportunity cost of cars when moving between any other two points.
D)  there is no opportunity cost when we move from B to C.E) A) and B)
F) A) and C)

Exam 2: Specialization and Exchange

The slope of a production possibilities frontier measures:

Correct Answer
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Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₃ to PPF₁?

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.Two possible consumption bundles that Country A could produce are:

Correct Answer
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Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₁ to PPF₂?

Correct Answer
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People often choose to specialize and trade because:

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?

Correct Answer
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If we consider the reality that each worker has different skills,then the production possibilities frontier would:

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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Correct Answer
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Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Country A has the comparative advantage in:

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.Canada has the opportunity cost of a pair of shoes than the United States,so: .

Correct Answer
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We say that a country completely specializes in production when it spends all of its resources producing:

Correct Answer
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Correct Answer
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Correct Answer
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When a producer is operating efficiently it is producing:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown.If this society chooses to produce 200 bushels of apples it can produce no more than:

Correct Answer
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Which of the following statements about trade is true?

Correct Answer
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Suppose an American worker can make 100 chairs or catch 1,000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.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 cars when moving from point B to point C:

Correct Answer
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Exam 2: Specialization and Exchange

The slope of a production possibilities frontier measures:

Correct AnswerverifiedShow Answer

Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF3 to PPF1?

Correct AnswerverifiedShow Answer

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.Two possible consumption bundles that Country A could produce are:

Correct AnswerverifiedShow Answer

Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF1 to PPF2?

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People often choose to specialize and trade because:

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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?

Correct AnswerverifiedShow Answer

If we consider the reality that each worker has different skills,then the production possibilities frontier would:

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

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Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Country A has the comparative advantage in:

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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.Canada has the ____________ opportunity cost of a pair of shoes than the United States,so: ____________.

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We say that a country completely specializes in production when it spends all of its resources producing:

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Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a producer is operating efficiently it is producing:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown.If this society chooses to produce 200 bushels of apples it can produce no more than:

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Which of the following statements about trade is true?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 chairs or catch 1,000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.Which of the following statements is true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown.The opportunity cost of cars when moving from point B to point C:

Correct AnswerverifiedShow Answer

Correct Answer
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Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₃ to PPF₁?

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 curves in the figure shown.What is the most likely cause of a society moving from PPF₁ to PPF₂?

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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.Canada has the opportunity cost of a pair of shoes than the United States,so: .

Correct Answer
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