Question 1

Figure 3-1
 
-Refer to Figure 3-1.Suppose Cliff must work 5 hours to produce each bushel of corn.Then Cliff's production possibilities frontier is based on how many hours of work?

Accepted Answer

A)  0.2 hours
B)  2.5 hours
C)  15 hours
D)  20 hoursE) None of the above
F) B) and C)

Question 2

Figure 3-1
 
-Refer to Figure 3-1.The opportunity cost of 1 bushel of corn is

Accepted Answer

A)  4/5 bushel of wheat for Paul and 3/2 bushels of wheat for Cliff; thus, Paul has the comparative advantage in growing corn.
B)  4/5 bushel of wheat for Paul and 3/2 bushels of wheat for Cliff; thus, Cliff has the comparative advantage in growing corn.
C)  5/4 bushels of wheat for Paul and 2/3 bushel of wheat for Cliff; thus, Paul has the comparative advantage in growing corn.
D)  5/4 bushels of wheat for Paul and 2/3 bushel of wheat for Cliff; thus, Cliff has the comparative advantage in growing corn.E) A) and D)
F) A) and B)

Question 3

Table 3-1
 
-Refer to Table 3-1.The opportunity cost of 1 pound of potatoes for the rancher is

Accepted Answer

A)  5 hours of labor.
B)  4 hours of labor.
C)  5/4 pounds of meat.
D)  4/5 pound of meat.E) C) and D)
F) None of the above

Question 4

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

Accepted Answer

A)  Travis has an absolute advantage over Ricardo in trimming trees.
B)  Travis has a comparative advantage over Ricardo in mowing lawns.
C)  Ricardo has a comparative advantage over Travis in trimming trees.
D)  All of the above are correct.E) None of the above
F) B) and D)

Question 5

Differences in opportunity cost allow for gains from trade.

Accepted Answer

A) True 
 B)False

Question 6

Recently,it has been suggested by researchers that the theory of comparative advantage may explain the fact that

Accepted Answer

A)  Tiger Woods mows his own lawn.
B)  brilliant scholars write textbooks.
C)  Homo sapiens displaced Neanderthals.
D)  many countries impose tariffs.E) A) and C)
F) A) and B)

Question 7

Use the accompanying table to answer the following questions:
Table 3-6
 
-Refer to Table 3-6.The opportunity cost of 1 unit of bread in England is

Accepted Answer

A)  4 units of cheese.
B)  2 units of cheese.
C)  1 unit of cheese.
D)  1/2 unit of cheese.E) C) and D)
F) A) and B)

Question 8

Trade between countries

Accepted Answer

A)  allows each country to consume at a point outside its production possibilities frontier.
B)  limits a country's ability to produce goods and services on its own.
C)  must benefit both countries equally; otherwise, trade is not mutually beneficial.
D)  can best be understood by examining the countries' absolute advantages.E) None of the above
F) B) and D)

Question 9

International trade may make some individuals in a nation better off,while other individuals are made worse off.

Accepted Answer

A) True 
 B)False

Question 10

Table 3-3
 
-Refer to Table 3-3.If Montana and Missouri trade based on the principle of comparative advantage,Montana will export

Accepted Answer

A)  baskets and Missouri will export birdhouses.
B)  birdhouses and Missouri will export baskets.
C)  neither good and Missouri will export both goods.
D)  both goods and Missouri will export neither good.E) A) and C)
F) All of the above

Question 11

Jonathan can make a bird house in 3 hours.He can make a bird feeder in 1 hour.The opportunity cost to Jonathan of making a bird house is 1/3 bird feeder.

Accepted Answer

A) True 
 B)False

Question 12

A country's consumption possibilities frontier can be outside its production possibilities frontier if

Accepted Answer

A)  the country's technology is superior to the technologies of other countries.
B)  the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries.
C)  the country engages in trade.
D)  All of the above are correct.E) B) and C)
F) None of the above

Question 13

Table 3-4
Brenda and Eric run a business that involves setting up and testing computers. The following table applies.
 
-Refer to Table 3-4.Which of these points would not be on Brenda's production possibilities frontier,based on a 40-hour week and assuming Brenda can switch between setting up and testing computers at a constant rate?

Accepted Answer

A)  (60 computers tested, 0 computers set-up) 
B)  (30 computers tested, 40 computers set-up) 
C)  (12 computers tested, 60 computers set-up) 
D)  (6 computers tested, 72 computers set-up) E) B) and D)
F) A) and C)

Question 14

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) 
 
-Refer to Figure 3-5.The graph that is shown is called a

Accepted Answer

A)  supply line.
B)  opportunity line.
C)  production possibilities frontier.
D)  consumption possibilities frontier.E) None of the above
F) A) and B)

Question 15

Table 3-5
 
-Refer to Table 3-5.If Japan and the United States trade based on the principle of comparative advantage,

Accepted Answer

A)  both countries can consume outside of their respective production possibilities frontiers.
B)  both countries can have more airplanes and cars than they would have without trade.
C)  Japan will specialize in cars and the United States will specialize in airplanes.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 16

These figures illustrate the production possibilities available to Barney and Betty with 8 hours of labor in their baker
Figure 3-4
 
-Refer to Figure 3-4.The opportunity cost of 1 loaf of bread for Barney is

Accepted Answer

A)  1/4 pie.
B)  1/2 pie.
C)  1 pie.
D)  2 pies.E) B) and C)
F) None of the above

Question 17

For the following question(s) , use the accompanying table.
Table 3-2
 
-Refer to Table 3-2.For Carolyn,the opportunity cost of 1 dress is

Accepted Answer

A)  5 quilts.
B)  4 quilts.
C)  1/2 quilt.
D)  1/10 quilt.E) A) and D)
F) B) and C)

Question 18

Figure 3-1
 
-Refer to Figure 3-1.Which of the following statements is correct?

Accepted Answer

A)  Paul has an absolute advantage in both wheat and corn.
B)  Paul has an absolute advantage in wheat and Cliff has an absolute advantage in corn.
C)  Cliff has an absolute advantage in wheat and Paul has an absolute advantage in corn.
D)  Cliff has an absolute advantage in both wheat and corn.E) B) and D)
F) None of the above

Question 19

Table 3-3
 
-Refer to Table 3-3.The opportunity cost of 1 basket for Missouri is

Accepted Answer

A)  1/4 birdhouse.
B)  1/2 birdhouse.
C)  2 birdhouses.
D)  2 2/3 birdhouses.E) B) and D)
F) A) and B)

Question 20

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) 
 
-Refer to Figure 3-5.The fact that the line slopes downward reflects the fact that

Accepted Answer

A)  for Country A, it is more costly to produce a car than it is to produce a bushel of corn.
B)  Country A will produce more cars and fewer bushels of corn as time goes by.
C)  Country A faces a tradeoff between producing cars and producing corn.
D)  Country A should specialize in producing corn.E) All of the above
F) A) and D)

Exam 3: Interdependence and the Gains From Trade

These figures illustrate the production possibilities available to Barney and Betty with 8 hours of labor in their baker Figure 3-4 -Refer to Figure 3-4.The opportunity cost of 1 loaf of bread for Barney is

Correct Answer
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Trade between countries

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Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.The fact that the line slopes downward reflects the fact that

Correct Answer
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International trade may make some individuals in a nation better off,while other individuals are made worse off.

Correct Answer
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Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

Correct Answer
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Use the accompanying table to answer the following questions: Table 3-6 -Refer to Table 3-6.The opportunity cost of 1 unit of bread in England is

Correct Answer
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Jonathan can make a bird house in 3 hours.He can make a bird feeder in 1 hour.The opportunity cost to Jonathan of making a bird house is 1/3 bird feeder.

Correct Answer
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Figure 3-1 -Refer to Figure 3-1.Suppose Cliff must work 5 hours to produce each bushel of corn.Then Cliff's production possibilities frontier is based on how many hours of work?

Correct Answer
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Table 3-3 -Refer to Table 3-3.If Montana and Missouri trade based on the principle of comparative advantage,Montana will export

Correct Answer
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Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.The graph that is shown is called a

Correct Answer
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Table 3-1 -Refer to Table 3-1.The opportunity cost of 1 pound of potatoes for the rancher is

Correct Answer
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Table 3-5 -Refer to Table 3-5.If Japan and the United States trade based on the principle of comparative advantage,

Correct Answer
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Figure 3-1 -Refer to Figure 3-1.Which of the following statements is correct?

Correct Answer
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A country's consumption possibilities frontier can be outside its production possibilities frontier if

Correct Answer
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Recently,it has been suggested by researchers that the theory of comparative advantage may explain the fact that

Correct Answer
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Differences in opportunity cost allow for gains from trade.

Correct Answer
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Table 3-3 -Refer to Table 3-3.The opportunity cost of 1 basket for Missouri is

Correct Answer
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For the following question(s) , use the accompanying table. Table 3-2 -Refer to Table 3-2.For Carolyn,the opportunity cost of 1 dress is

Correct Answer
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Figure 3-1 -Refer to Figure 3-1.The opportunity cost of 1 bushel of corn is

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

These figures illustrate the production possibilities available to Barney and Betty with 8 hours of labor in their baker Figure 3-4 -Refer to Figure 3-4.The opportunity cost of 1 loaf of bread for Barney is

Correct AnswerverifiedShow Answer

Trade between countries

Correct AnswerverifiedShow Answer

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.The fact that the line slopes downward reflects the fact that

Correct AnswerverifiedShow Answer

International trade may make some individuals in a nation better off,while other individuals are made worse off.

Correct AnswerverifiedShow Answer

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the accompanying table to answer the following questions: Table 3-6 -Refer to Table 3-6.The opportunity cost of 1 unit of bread in England is

Correct AnswerverifiedShow Answer

Jonathan can make a bird house in 3 hours.He can make a bird feeder in 1 hour.The opportunity cost to Jonathan of making a bird house is 1/3 bird feeder.

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.Suppose Cliff must work 5 hours to produce each bushel of corn.Then Cliff's production possibilities frontier is based on how many hours of work?

Correct AnswerverifiedShow Answer

Table 3-3 -Refer to Table 3-3.If Montana and Missouri trade based on the principle of comparative advantage,Montana will export

Correct AnswerverifiedShow Answer

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.The graph that is shown is called a

Correct AnswerverifiedShow Answer

Table 3-1 -Refer to Table 3-1.The opportunity cost of 1 pound of potatoes for the rancher is

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Table 3-5 -Refer to Table 3-5.If Japan and the United States trade based on the principle of comparative advantage,

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Figure 3-1 -Refer to Figure 3-1.Which of the following statements is correct?

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A country's consumption possibilities frontier can be outside its production possibilities frontier if

Correct AnswerverifiedShow Answer

Recently,it has been suggested by researchers that the theory of comparative advantage may explain the fact that

Correct AnswerverifiedShow Answer

Differences in opportunity cost allow for gains from trade.

Correct AnswerverifiedShow Answer

Table 3-3 -Refer to Table 3-3.The opportunity cost of 1 basket for Missouri is

Correct AnswerverifiedShow Answer

For the following question(s) , use the accompanying table. Table 3-2 -Refer to Table 3-2.For Carolyn,the opportunity cost of 1 dress is

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.The opportunity cost of 1 bushel of corn is

Correct AnswerverifiedShow Answer

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