Question 1

-Because Bobby Jo and Mary Lou have __________ opportunity costs,they can experience __________ from specialization.

Accepted Answer

A)  identical;a gain 
B)  unequal;a gain 
C)  unequal;no gain 
D)  equal;no gain 
E)  unequal;a loss 
A)  identical;a gain 
B)  unequal;a gain 
C)  unequal;no gain 
D)  equal;no gain 
E)  unequal;a loss

Question 2

Given the production possibility tables for First and Second Bakeries presented below,what must be true?

Accepted Answer

A)  First Bakery has a comparative advantage in the production of both goods. 
B)  Second Bakery has a comparative advantage in the production of pies. 
C)  First Bakery has a comparative advantage in the production of pies. 
D)  Neither bakery has a comparative advantage. 
E)  Neither bakery has an absolute advantage. 
A)  First Bakery has a comparative advantage in the production of both goods. 
B)  Second Bakery has a comparative advantage in the production of pies. 
C)  First Bakery has a comparative advantage in the production of pies. 
D)  Neither bakery has a comparative advantage. 
E)  Neither bakery has an absolute advantage.

Question 3

If an economy takes advantage of the comparative advantage of some resources over others,the slope of its production possibilities curve is likely to be

Accepted Answer

A)  negative and constant. 
B)  positive and constant. 
C)  negative,but not constant. 
D)  positive,but not constant. 
E)  zero. 
A)  negative and constant. 
B)  positive and constant. 
C)  negative,but not constant. 
D)  positive,but not constant. 
E)  zero.

Question 4

In general,individuals should specialize in producing those goods for which they have a(n)

Accepted Answer

A)  absolute advantage. 
B)  comparative advantage. 
C)  absolutely comparative advantage. 
D)  absolute and comparative advantage. 
E)  comparatively absolute advantage. 
A)  absolute advantage. 
B)  comparative advantage. 
C)  absolutely comparative advantage. 
D)  absolute and comparative advantage. 
E)  comparatively absolute advantage.

Question 5

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below.  
-The opportunity cost of an extra calculator for Smith is __________ and for Jones it is __________.

Accepted Answer

A)  0.10 computers;0.05 computers 
B)  10 computers;6 computers 
C)  1 computer;0.5 computers 
D)  0.6 computers;1.2 computers 
E)  0.05 computers;0.10 computers 
A)  0.10 computers;0.05 computers 
B)  10 computers;6 computers 
C)  1 computer;0.5 computers 
D)  0.6 computers;1.2 computers 
E)  0.05 computers;0.10 computers

Question 6

For any efficient point with at least 10 computers and less than 120 calculators,Smith will __________ and Jones will __________.

Accepted Answer

A)  only produce computers;only produce calculators 
B)  only produce computers;split his time between computers and calculators 
C)  split his time between computers and calculators;only produce computers 
D)  evenly divide his time between the two;evenly divide his time between the two 
E)  only produce calculators;only produce computers 
A)  only produce computers;only produce calculators 
B)  only produce computers;split his time between computers and calculators 
C)  split his time between computers and calculators;only produce computers 
D)  evenly divide his time between the two;evenly divide his time between the two 
E)  only produce calculators;only produce computers

Question 7

The principle of comparative advantage states that specialization increases productivity,but the principle of increasing opportunity costs states that when you increase production of a single good you must use increasingly costly resources.These two principles

Accepted Answer

A)  are evidence that economic theory is internally inconsistent. 
B)  are an example of the difference between abstract models and the real world. 
C)  cannot be true at the same time. 
D)  together account for the outward bow shape of production possibility curves. 
E)  explain the circular flow of income. 
A)  are evidence that economic theory is internally inconsistent. 
B)  are an example of the difference between abstract models and the real world. 
C)  cannot be true at the same time. 
D)  together account for the outward bow shape of production possibility curves. 
E)  explain the circular flow of income.

Question 8

-Refer to the graph above.The graph indicates that,as more rye is produced,the opportunity cost of producing rye

Accepted Answer

A)  increases. 
B)  remains constant. 
C)  decreases. 
D)  eventually becomes infinite. 
E)  is zero. 
A)  increases. 
B)  remains constant. 
C)  decreases. 
D)  eventually becomes infinite. 
E)  is zero.

Question 9

A country's production possibilities curve is concave to the origin (i.e. ,bowed out from the origin)because

Accepted Answer

A)  of the principle of scarcity. 
B)  the production of one good is expanded by first employing those resources with an absolute advantage. 
C)  the production of one good is expanded by first employing those resources with the lowest opportunity cost. 
D)  there is a trade off that requires a decrease in the production of one good in order to increase the production of the other good. 
E)  of the principle of absolute advantage. 
A)  of the principle of scarcity. 
B)  the production of one good is expanded by first employing those resources with an absolute advantage. 
C)  the production of one good is expanded by first employing those resources with the lowest opportunity cost. 
D)  there is a trade off that requires a decrease in the production of one good in order to increase the production of the other good. 
E)  of the principle of absolute advantage.

Question 10

One of the major characteristics of the circular flow in our economy is

Accepted Answer

A)  the production possibility curve. 
B)  market prices. 
C)  opportunity cost. 
D)  specialization and exchange. 
E)  absolute advantage. 
A)  the production possibility curve. 
B)  market prices. 
C)  opportunity cost. 
D)  specialization and exchange. 
E)  absolute advantage.

Question 11

Refer to the graph below.Given Mary and Paul's production possibilities tables for answering economics and math problems,which curve represents their combined production possibilities curve if they take advantage of their comparative advantages?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  Not shown. 
A)  A 
B)  B 
C)  C 
D)  D 
E)  Not shown.

Question 12

Teddy's production possibilities curve for goods M and N is described by the following equation: M = 21 - 3N,where M is the quantity of good M produced and N is the quantity of good N produced.The slope of Teddy's production possibilities curve,when M is on the vertical axis,is

Accepted Answer

A)  -3. 
B)  3. 
C)  -0.333. 
D)  0.333. 
E)  0.0333. 
A)  -3. 
B)  3. 
C)  -0.333. 
D)  0.333. 
E)  0.0333.

Question 13

-Refer to the graph above.Given Vineetstan's production possibility curve of listening to CDs or reading magazine articles in one week,when moving from point A to point B,the opportunity cost of listening to each CD in terms of reading articles is

Accepted Answer

A)  ½ article. 
B)  1 article. 
C)  2 articles. 
D)  3 articles. 
E)  4 articles. 
A)  ½ article. 
B)  1 article. 
C)  2 articles. 
D)  3 articles. 
E)  4 articles.

Question 14

Economic growth can generally be represented by _______________ the production possibilities curve.

Accepted Answer

A)  an inward shift of 
B)  an unpredictable change in 
C)  no change in 
D)  either an inward or an outward shift of 
E)  an outward shift of 
A)  an inward shift of 
B)  an unpredictable change in 
C)  no change in 
D)  either an inward or an outward shift of 
E)  an outward shift of

Question 15

The opportunity cost of an extra unit of food is

Accepted Answer

A)  0.333 fewer weapons. 
B)  3.33 fewer weapons. 
C)  33.3 fewer weapons. 
D)  fewer weapons but the exact number cannot be calculated. 
E)  18 fewer weapons. 
A)  0.333 fewer weapons. 
B)  3.33 fewer weapons. 
C)  33.3 fewer weapons. 
D)  fewer weapons but the exact number cannot be calculated. 
E)  18 fewer weapons.

Question 16

Good W is on the vertical axis and good Z is on the horizontal axis of a production possibilities curve.An increase in the amount of training received only by workers producing good Z would cause the production possibilities curve to

Accepted Answer

A)  become steeper. 
B)  shift away from the origin. 
C)  become flatter. 
D)  shift towards the origin. 
E)  change in an unpredictable way. 
A)  become steeper. 
B)  shift away from the origin. 
C)  become flatter. 
D)  shift towards the origin. 
E)  change in an unpredictable way.

Question 17

If a given production combination is known to be attainable,then it must be

Accepted Answer

A)  on the production possibilities curve. 
B)  beyond the production possibilities curve. 
C)  an efficient point. 
D)  an inefficient point. 
E)  either an inefficient or efficient point. 
A)  on the production possibilities curve. 
B)  beyond the production possibilities curve. 
C)  an efficient point. 
D)  an inefficient point. 
E)  either an inefficient or efficient point.

Question 18

-Sam possesses an absolute advantage in

Accepted Answer

A)  the production of shoes. 
B)  neither shoe nor pants production. 
C)  the production of pants. 
D)  both shoe and pants production. 
E)  pants and possibly shoe production. 
A)  the production of shoes. 
B)  neither shoe nor pants production. 
C)  the production of pants. 
D)  both shoe and pants production. 
E)  pants and possibly shoe production.

Question 19

A reduction in the length of the workday would cause the production possibilities curve to

Accepted Answer

A)  become steeper. 
B)  shift away from the origin. 
C)  become flatter. 
D)  shift towards the origin. 
E)  change in an unpredictable way. 
A)  become steeper. 
B)  shift away from the origin. 
C)  become flatter. 
D)  shift towards the origin. 
E)  change in an unpredictable way.

Question 20

The major cost,or penalty,imposed by increasing specialization is

Accepted Answer

A)  excessive workloads. 
B)  reduced variation in work tasks. 
C)  reduced variety in the types of jobs. 
D)  increased worker vulnerability to being fired. 
E)  being good at many jobs,but not an expert in any of them. 
A)  excessive workloads. 
B)  reduced variation in work tasks. 
C)  reduced variety in the types of jobs. 
D)  increased worker vulnerability to being fired. 
E)  being good at many jobs,but not an expert in any of them.

-Because Bobby Jo and Mary Lou have opportunity costs,they can experience from specialization.

Given the production possibility tables for First and Second Bakeries presented below,what must be true?

If an economy takes advantage of the comparative advantage of some resources over others,the slope of its production possibilities curve is likely to be

In general,individuals should specialize in producing those goods for which they have a(n)

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below. -The opportunity cost of an extra calculator for Smith is and for Jones it is .

For any efficient point with at least 10 computers and less than 120 calculators,Smith will and Jones will .

The principle of comparative advantage states that specialization increases productivity,but the principle of increasing opportunity costs states that when you increase production of a single good you must use increasingly costly resources.These two principles

-Refer to the graph above.The graph indicates that,as more rye is produced,the opportunity cost of producing rye

A country's production possibilities curve is concave to the origin (i.e. ,bowed out from the origin)because

One of the major characteristics of the circular flow in our economy is

Refer to the graph below.Given Mary and Paul's production possibilities tables for answering economics and math problems,which curve represents their combined production possibilities curve if they take advantage of their comparative advantages?

Teddy's production possibilities curve for goods M and N is described by the following equation: M = 21 - 3N,where M is the quantity of good M produced and N is the quantity of good N produced.The slope of Teddy's production possibilities curve,when M is on the vertical axis,is

-Refer to the graph above.Given Vineetstan's production possibility curve of listening to CDs or reading magazine articles in one week,when moving from point A to point B,the opportunity cost of listening to each CD in terms of reading articles is

Economic growth can generally be represented by _______________ the production possibilities curve.

The opportunity cost of an extra unit of food is

Good W is on the vertical axis and good Z is on the horizontal axis of a production possibilities curve.An increase in the amount of training received only by workers producing good Z would cause the production possibilities curve to

If a given production combination is known to be attainable,then it must be

-Sam possesses an absolute advantage in

A reduction in the length of the workday would cause the production possibilities curve to

The major cost,or penalty,imposed by increasing specialization is

Thinking Like an Economist

Supply and Demand: an Introduction

Demand: the Benefit Side of the Market

Perfectly Competitive Supply: the Cost Side of the Market

Efficiency and Exchange

The Quest for Profit and the Invisible Hand

Monopoly and Other Forms of Imperfect Competition

Thinking Strategically

Externalities and Property Rights

The Economics of Information

Labour Markets

The Economics of Public Policy

Public Goods and Taxation

Income Distribution

Filters

Exam 2: Comparative Advantage: the Basis for Exchange

-Because Bobby Jo and Mary Lou have __________ opportunity costs,they can experience __________ from specialization.

Given the production possibility tables for First and Second Bakeries presented below,what must be true?

If an economy takes advantage of the comparative advantage of some resources over others,the slope of its production possibilities curve is likely to be

In general,individuals should specialize in producing those goods for which they have a(n)

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below. -The opportunity cost of an extra calculator for Smith is __________ and for Jones it is __________.

For any efficient point with at least 10 computers and less than 120 calculators,Smith will __________ and Jones will __________.

The principle of comparative advantage states that specialization increases productivity,but the principle of increasing opportunity costs states that when you increase production of a single good you must use increasingly costly resources.These two principles

-Refer to the graph above.The graph indicates that,as more rye is produced,the opportunity cost of producing rye

A country's production possibilities curve is concave to the origin (i.e. ,bowed out from the origin)because

One of the major characteristics of the circular flow in our economy is

Refer to the graph below.Given Mary and Paul's production possibilities tables for answering economics and math problems,which curve represents their combined production possibilities curve if they take advantage of their comparative advantages?

Teddy's production possibilities curve for goods M and N is described by the following equation: M = 21 - 3N,where M is the quantity of good M produced and N is the quantity of good N produced.The slope of Teddy's production possibilities curve,when M is on the vertical axis,is

-Refer to the graph above.Given Vineetstan's production possibility curve of listening to CDs or reading magazine articles in one week,when moving from point A to point B,the opportunity cost of listening to each CD in terms of reading articles is

Economic growth can generally be represented by _______________ the production possibilities curve.

The opportunity cost of an extra unit of food is

Good W is on the vertical axis and good Z is on the horizontal axis of a production possibilities curve.An increase in the amount of training received only by workers producing good Z would cause the production possibilities curve to

If a given production combination is known to be attainable,then it must be

-Sam possesses an absolute advantage in

A reduction in the length of the workday would cause the production possibilities curve to

The major cost,or penalty,imposed by increasing specialization is

Thinking Like an Economist

Supply and Demand: an Introduction

Demand: the Benefit Side of the Market

Perfectly Competitive Supply: the Cost Side of the Market

Efficiency and Exchange

The Quest for Profit and the Invisible Hand

Monopoly and Other Forms of Imperfect Competition

Thinking Strategically

Externalities and Property Rights

The Economics of Information

Labour Markets

The Economics of Public Policy

Public Goods and Taxation

Income Distribution

Filters

-Because Bobby Jo and Mary Lou have opportunity costs,they can experience from specialization.

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below. -The opportunity cost of an extra calculator for Smith is and for Jones it is .

For any efficient point with at least 10 computers and less than 120 calculators,Smith will and Jones will .