Question 1

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 comparative advantage in the production of:

Accepted Answer

A)   iPods only.
B)   tablets only.
C)   both iPods and tablets.
D)   neither iPods nor tablets.E) None of the above
F) All of the above

Question 2

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

Accepted Answer

A)   Producing at point A is the best choice, because some of both items are made.
B)   Producing at point D would be inefficient, since no books would be produced.
C)   Producing at point C is the best choice, because it's closest to the middle.
D)   Producing at point B is impossible.E) B) and D)
F) B) and C)

Question 3

If a country possesses the absolute advantage in the production of one good:

Accepted Answer

A)   then it must also possess the absolute advantage in the production of the other good.
B)   then it must also possess the comparative advantage in the production of both goods.
C)   then it must also possess the comparative advantage in the production of the other good.
D)   it can produce more of that good given the same resources.E) A) and D)
F) None of the above

Question 4

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Suppose that a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has an absolute advantage in:

Accepted Answer

A)   the production of bananas, but not tomatoes.
B)   the production of both bananas and tomatoes.
C)   the production of tomatoes, but not bananas.
D)   neither good.E) B) and C)
F) All of the above

Question 5

When nations trade the result would most likely be:

Accepted Answer

A)   increase in total production, which can benefit every nation involved.
B)   increase in total production, which would benefit only the wealthier nation.
C)   decrease in total production across nations but increases it for some.
D)   decrease in total production across all nations but benefits every nation because they are individually more productive.E) A) and B)
F) A) and C)

Question 6

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After examining the production possibilities of each country,we can surmise that Country A's opportunity cost of a car:

Accepted Answer

A)  is lower than that of Country B,and so they should specialize in cars and trade.
B)  is higher than that of Country B,and so they should specialize in cars and trade.
C)  is the same as that of Country B,and so they will not benefit from trade.
D)  does not determine a country's decision to trade; it is absolute advantage that drives that decision.E) A) and B)
F) A) and C)

Question 7

If France is capable of producing either cheese or wine or some combination of those two products,then France should:

Accepted Answer

A)   produce the one it is more efficient at producing.
B)   produce the one for which it has a comparative advantage.
C)   produce the one for which it has a higher opportunity cost.
D)   remain self-sufficient if it has the absolute advantage in the production of both.E) B) and C)
F) A) and B)

Question 8

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.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) A) and C)
F) A) and D)

Question 9

A realistic production possibilities curve:

Accepted Answer

A)   is concave while a simple PPF has constant opportunity costs.
B)   is straight lined while a simple PPFhas constant opportunity costs.
C)   is straight lined while a simple PPF is bowed outward.
D)   is concave while a simple PPFhas increasing opportunity costs.E) B) and C)
F) C) and D)

Question 10

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)   has unemployed workers.
D)   is able to reach a point beyond its production possibilities frontier.E) B) and C)
F) None of the above

Question 11

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.Suppose Country A specializes in bananas,and Country B specializes in tomatoes.The limits to the terms of trade that Country B would find acceptable are Country B will accept no:

Accepted Answer

A)   more than 3 bananas for each tomato.
B)   less than 3 bananas for each tomato.
C)   more than 1 tomato for every 3 bananas.
D)   less than 1 tomato for every 3 bananas.E) None of the above
F) A) and B)

Question 12

The United States and Canada trade hockey skates and apple pie.If the United States has an absolute and a comparative advantage in the production of apple pie,then:

Accepted Answer

A)   Canada must have the comparative advantage in the production of skates.
B)   Canada must have the absolute advantage in the production of skates.
C)   Canada must have the absolute and comparative advantage in the production of skates.
D)   the United States must also have the comparative advantage in the production of skates.E) B) and D)
F) None of the above

Question 13

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is true? The opportunity cost of one watermelon:

Accepted Answer

A)  will decrease as more watermelons are produced.
B)  is constant.
C)  will increase as more watermelons are produced.
D)  is zero at point C.E) A) and D)
F) None of the above

Question 14

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 would be using resources efficiently if they were producing:

Accepted Answer

A)   (200 iPods, 1,750 tablets) .
B)   (200 iPods, 1,500 tablets) .
C)   (200 iPods, 1,000 tablets) .
D)   (200 iPods, 750 tablets) .E) A) and D)
F) All of the above

Question 15

When a producer has a comparative advantage in 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 C)
F) All of the above

Question 16

Consider the production possibilities frontier displayed in the figure shown.Which of the following combinations could be produced?

Accepted Answer

A)   (20 watermelons, 400 bushels of apples) 
B)   (15 watermelons, 100 bushels of apples) 
C)   (10 watermelons, 300 bushels of apples) 
D)   (10 watermelons, 400 bushels of apples) E) A) and B)
F) All of the above

Question 17

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.On the other hand,a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day.Using the concept of absolute advantage,which of the following statements is true? The United States:

Accepted Answer

A)   has the absolute advantage in the production of both gloves and radishes.
B)   does not have the absolute advantage in the production of either gloves or radishes.
C)   has the absolute advantage in the production of gloves, but not radishes.
D)   has the absolute advantage in the production of radishes, but not gloves.E) B) and C)
F) None of the above

Question 18

Suppose the figure shown represents the production possibilities frontier for Country A.Which of the following combinations of goods could Country A consume in the absence of trade?

Accepted Answer

A)  (15 airplanes,15 trucks) 
B)  (10 airplanes,25 trucks) 
C)  (10 airplanes,30 trucks) 
D)  (5 airplanes,30 trucks) E) All of the above
F) A) and D)

Question 19

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

Accepted Answer

A)   would display a constant opportunity cost of a good as more of that good is produced.
B)   would display a decreasing opportunity cost of a good as more of that good is produced.
C)   would display an increasing opportunity cost of a good as more of that good is produced.
D)   cannot be drawn, as too many variables would need to be taken into consideration.E) A) and D)
F) B) and C)

Question 20

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.Which of the following statements is true?

Accepted Answer

A)   The United States has a comparative advantage in the production of shoes.
B)   Canada has a comparative advantage in the production of shoes.
C)   Comparative advantage doesn't exist in this scenario.
D)   Both countries have a comparative advantage in the production of shoes.E) A) and C)
F) None of the above

Exam 2: Specialization and Exchange

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 comparative advantage in the production of:

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

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.Which of the following statements is true?

Correct Answer
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Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.On the other hand,a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day.Using the concept of absolute advantage,which of the following statements is true? The United States:

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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Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After examining the production possibilities of each country,we can surmise that Country A's opportunity cost of a car:

Correct Answer
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Suppose that a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has an absolute advantage in:

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

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

Correct Answer
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The United States and Canada trade hockey skates and apple pie.If the United States has an absolute and a comparative advantage in the production of apple pie,then:

Correct Answer
verified

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

Correct Answer
verified

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.The opportunity cost of one tomato is:

Correct Answer
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Correct Answer
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If France is capable of producing either cheese or wine or some combination of those two products,then France should:

Correct Answer
verified

When nations trade the result would most likely be:

Correct Answer
verified

A realistic production possibilities curve:

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown.Which of the following combinations could be produced?

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.Country B would be using resources efficiently if they were producing:

Correct Answer
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If a country possesses the absolute advantage in the production of one good:

Correct Answer
verified

Suppose the figure shown represents the production possibilities frontier for Country A.Which of the following combinations of goods could Country A consume in the absence of trade?

Correct Answer
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Exam 2: Specialization and Exchange

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 comparative advantage in the production of:

Correct AnswerverifiedShow Answer

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

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.Which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.On the other hand,a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day.Using the concept of absolute advantage,which of the following statements is true? The United States:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After examining the production possibilities of each country,we can surmise that Country A's opportunity cost of a car:

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Suppose that a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has an absolute advantage in:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is true? The opportunity cost of one watermelon:

Correct AnswerverifiedShow Answer

When a country is producing goods and services efficiently it:

Correct AnswerverifiedShow Answer

The United States and Canada trade hockey skates and apple pie.If the United States has an absolute and a comparative advantage in the production of apple pie,then:

Correct AnswerverifiedShow Answer

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

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.The opportunity cost of one tomato is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If France is capable of producing either cheese or wine or some combination of those two products,then France should:

Correct AnswerverifiedShow Answer

When nations trade the result would most likely be:

Correct AnswerverifiedShow Answer

A realistic production possibilities curve:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown.Which of the following combinations could be produced?

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.Country B would be using resources efficiently if they were producing:

Correct AnswerverifiedShow Answer

If a country possesses the absolute advantage in the production of one good:

Correct AnswerverifiedShow Answer

Suppose the figure shown represents the production possibilities frontier for Country A.Which of the following combinations of goods could Country A consume in the absence of trade?

Correct AnswerverifiedShow Answer

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