Question 1

If Kingsley can sell paper at a lower opportunity cost than Todrick,then ________ has a(n)________ advantage in paper sales.

Accepted Answer

A)  Kingsley; absolute 
B)  Todrick; absolute 
C)  Kingsley; positive 
D)  Kingsley; comparative 
E)  Todrick; comparative 
A)  Kingsley; absolute 
B)  Todrick; absolute 
C)  Kingsley; positive 
D)  Kingsley; comparative 
E)  Todrick; comparative

Question 2

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources.The community's production possibilities frontier (PPF)would show an

Accepted Answer

A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost. 
A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost.

Question 3

Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the following questions.  
-What is Mikhail's opportunity cost of a sculpture?

Accepted Answer

A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture 
A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture

Question 4

The figure depicts a shift in a society’s production possibilities frontier (PPF) for the manufacture of trains and planes: train-manufacturing capacity expands while plane-manufacturing capacity shrinks. Refer to this figure to answer the following questions.  
-Which point ceases to represent a production possibility?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 5

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

Accepted Answer

Unemployed labor resources mean that,as

Question 6

Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the following questions.  
-Based on the table,does Mikhail or Stefan have an absolute advantage?

Accepted Answer

A)  Yes,Mikhail has an absolute advantage in both sculptures and paintings. 
B)  Yes,Stefan has an absolute advantage in both sculptures and paintings. 
C)  Yes,Mikhail has an absolute advantage in paintings,and Stefan has an absolute advantage in sculptures. 
D)  Yes,Mikhail has an absolute advantage in sculptures,and Stefan has an absolute advantage in paintings. 
E)  No,neither has an absolute advantage. 
A)  Yes,Mikhail has an absolute advantage in both sculptures and paintings. 
B)  Yes,Stefan has an absolute advantage in both sculptures and paintings. 
C)  Yes,Mikhail has an absolute advantage in paintings,and Stefan has an absolute advantage in sculptures. 
D)  Yes,Mikhail has an absolute advantage in sculptures,and Stefan has an absolute advantage in paintings. 
E)  No,neither has an absolute advantage.

Question 7

Wilbur and Orville Wright's testing of wing designs in a wind tunnel is an example of using

Accepted Answer

A)  observations to construct models. 
B)  hypotheses to test observations. 
C)  a theory to formulate hypotheses. 
D)  models to collect data. 
E)  data to make predictions. 
A)  observations to construct models. 
B)  hypotheses to test observations. 
C)  a theory to formulate hypotheses. 
D)  models to collect data. 
E)  data to make predictions.

Question 8

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF),it can only increase the production of one good by

Accepted Answer

A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production. 
A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production.

Question 9

Mrs.Abel has a comparative advantage in producing cabbage if,in comparison to Mr.Lace,Mrs.Abel can grow cabbage

Accepted Answer

A)  with less labor. 
B)  with fewer inputs. 
C)  at a lower equilibrium. 
D)  at a lower opportunity cost. 
E)  with less technology. 
A)  with less labor. 
B)  with fewer inputs. 
C)  at a lower equilibrium. 
D)  at a lower opportunity cost. 
E)  with less technology.

Question 10

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the following questions.  
-Which statement best describes the absolute advantage as shown in the graphs?

Accepted Answer

A)  Kenzi has an absolute advantage in the production of both. 
B)  Bo has an absolute advantage in the production of both. 
C)  Bo has an absolute advantage in the production of pizzas,and Kenzi has an absolute advantage in the production of stromboli. 
D)  Kenzi has an absolute advantage in the production of pizzas,and Bo has an absolute advantage in the production of stromboli. 
E)  They both have an absolute advantage in the production of stromboli. 
A)  Kenzi has an absolute advantage in the production of both. 
B)  Bo has an absolute advantage in the production of both. 
C)  Bo has an absolute advantage in the production of pizzas,and Kenzi has an absolute advantage in the production of stromboli. 
D)  Kenzi has an absolute advantage in the production of pizzas,and Bo has an absolute advantage in the production of stromboli. 
E)  They both have an absolute advantage in the production of stromboli.

Question 11

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the following questions.          
-Suppose the plow is invented and agricultural productivity greatly increases.Which of the following graphs best depicts how this would affect the PPF?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 12

How can a person who is "better" or more efficient (in that he or she has an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Accepted Answer

It sometimes seems counterintuitive that

Question 13

Consider the following scenario to answer the following questions: Two friends, Monica and Chandler, enjoy baking bread and making apple pies. Monica takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Chandler takes four hours to bake 1 loaf of bread and four hours to make 1 pie.
-If Monica and Chandler decide to specialize in order to maximize their combined output,who should produce what?

Accepted Answer

A)  Chandler should specialize in making pies because he has an absolute advantage. 
B)  Monica should specialize in making pies and Chandler should specialize in making bread. 
C)  Chandler should specialize in making pies and Monica should specialize in making bread. 
D)  Monica should specialize in making bread and pies because she has a comparative advantage in both. 
E)  Monica should not specialize because she is better at producing both. 
A)  Chandler should specialize in making pies because he has an absolute advantage. 
B)  Monica should specialize in making pies and Chandler should specialize in making bread. 
C)  Chandler should specialize in making pies and Monica should specialize in making bread. 
D)  Monica should specialize in making bread and pies because she has a comparative advantage in both. 
E)  Monica should not specialize because she is better at producing both.

Question 14

Refer to the following figure to answer the following questions. 
-Which point in the corresponding figure shows that productive resources are NOT fully employed?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Exam 2: Model Building and Gains From Trade

If Kingsley can sell paper at a lower opportunity cost than Todrick,then ________ has a(n)________ advantage in paper sales.

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources.The community's production possibilities frontier (PPF)would show an

Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the following questions. -What is Mikhail's opportunity cost of a sculpture?

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the following questions. -Based on the table,does Mikhail or Stefan have an absolute advantage?

Wilbur and Orville Wright's testing of wing designs in a wind tunnel is an example of using

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF),it can only increase the production of one good by

Mrs.Abel has a comparative advantage in producing cabbage if,in comparison to Mr.Lace,Mrs.Abel can grow cabbage

How can a person who is "better" or more efficient (in that he or she has an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Refer to the following figure to answer the following questions. -Which point in the corresponding figure shows that productive resources are NOT fully employed?

Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings,interest Rates,and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

If Kingsley can sell paper at a lower opportunity cost than Todrick,then has a(n) advantage in paper sales.