Question 1

If there is no trade, which of the following is most likely?

Accepted Answer

A)  A country is better off because it will become self-sufficient. 
B)  A country's production possibilities frontier is also its consumption possibilities frontier. 
C)  A country can still benefit from international specialization. 
D)  A country has more product variety available. 
A)  A country is better off because it will become self-sufficient. 
B)  A country's production possibilities frontier is also its consumption possibilities frontier. 
C)  A country can still benefit from international specialization. 
D)  A country has more product variety available.

Question 2

Spain and Germany can both produce fish and cars. Spain has a comparative advantage in cars, but Germany has an absolute advantage in cars. What would Germany import from Spain?

Accepted Answer

A)  Nothing, because Germany has a comparative advantage in fish and an absolute advantage in cars. 
B)  Cars, because it is relatively cheaper for Spain to produce them. 
C)  Fish, because Germany can produce cars cheaper than Spain. 
D)  Both fish and cars, because Germany's absolute advantage in cars creates more income. 
A)  Nothing, because Germany has a comparative advantage in fish and an absolute advantage in cars. 
B)  Cars, because it is relatively cheaper for Spain to produce them. 
C)  Fish, because Germany can produce cars cheaper than Spain. 
D)  Both fish and cars, because Germany's absolute advantage in cars creates more income.

Question 3

What is the best reason for people to provide you with goods and services?

Accepted Answer

A)  They are acting out of generosity. 
B)  They are acting out of fairness. 
C)  They do so because they get something in return. 
D)  They are required to do so by the government. 
A)  They are acting out of generosity. 
B)  They are acting out of fairness. 
C)  They do so because they get something in return. 
D)  They are required to do so by the government.

Question 4

-Refer to the table. What is the opportunity cost of one beach ball for Winter?

Accepted Answer

A)  1/4 sled 
B)  3/4 sled 
C)  1 sled 
D)  4/3 sleds 
A)  1/4 sled 
B)  3/4 sled 
C)  1 sled 
D)  4/3 sleds

Question 5

Figure 3-1  
-Refer to Figure 3-1. What is the opportunity cost of 1 bushel of wheat for Cliff?

Accepted Answer

A)  1/3 bushel of corn 
B)  2/3 bushel of corn 
C)  1 bushel of corn 
D)  3/2 bushels of corn 
A)  1/3 bushel of corn 
B)  2/3 bushel of corn 
C)  1 bushel of corn 
D)  3/2 bushels of corn

Question 6

Which of the following would NOT occur if each person specializes in the good for which they have a comparative advantage?

Accepted Answer

A)  Each person's production possibilities frontier will shift outward. 
B)  Total production in the economy will increase. 
C)  Everyone can be better off with specialization and trade. 
D)  The size of the economic pie will increase. 
A)  Each person's production possibilities frontier will shift outward. 
B)  Total production in the economy will increase. 
C)  Everyone can be better off with specialization and trade. 
D)  The size of the economic pie will increase.

If there is no trade, which of the following is most likely?

Spain and Germany can both produce fish and cars. Spain has a comparative advantage in cars, but Germany has an absolute advantage in cars. What would Germany import from Spain?

What is the best reason for people to provide you with goods and services?

-Refer to the table. What is the opportunity cost of one beach ball for Winter?

Figure 3-1 -Refer to Figure 3-1. What is the opportunity cost of 1 bushel of wheat for Cliff?

Which of the following would NOT occur if each person specializes in the good for which they have a comparative advantage?

Ten Principles of Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 3: Interdependence and the Gains From Trade

If there is no trade, which of the following is most likely?

Spain and Germany can both produce fish and cars. Spain has a comparative advantage in cars, but Germany has an absolute advantage in cars. What would Germany import from Spain?

What is the best reason for people to provide you with goods and services?

-Refer to the table. What is the opportunity cost of one beach ball for Winter?

Figure 3-1 -Refer to Figure 3-1. What is the opportunity cost of 1 bushel of wheat for Cliff?

Which of the following would NOT occur if each person specializes in the good for which they have a comparative advantage?

Ten Principles of Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters