Question 1

Refer to the table below.According to the table, Martha has the absolute advantage in:

Accepted Answer

A) pies. 
B) neither pies nor cakes. 
C) cakes. 
D) both pies and cakes. 
A) pies. 
B) neither pies nor cakes. 
C) cakes. 
D) both pies and cakes.

Question 2

Larry has a comparative advantage over his classmates in writing term papers if he:

Accepted Answer

A) can write term papers faster than his classmates. 
B) has an absolute advantage in writing term papers. 
C) always earns an A on his term papers. 
D) has a lower opportunity cost of writing term papers than his classmates. 
A) can write term papers faster than his classmates. 
B) has an absolute advantage in writing term papers. 
C) always earns an A on his term papers. 
D) has a lower opportunity cost of writing term papers than his classmates.

Question 3

Which of the following statements is true?

Accepted Answer

A) Absolute advantage implies comparative advantage. 
B) Comparative advantage does not require absolute advantage. 
C) Absolute advantage requires comparative advantage. 
D) Comparative advantage requires absolute advantage. 
A) Absolute advantage implies comparative advantage. 
B) Comparative advantage does not require absolute advantage. 
C) Absolute advantage requires comparative advantage. 
D) Comparative advantage requires absolute advantage.

Question 4

One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:

Accepted Answer

A) the total value of goods and services produced by the United States to fall. 
B) wages in Mexico to rise. 
C) highly skilled workers in the United States to lose their jobs. 
D) unskilled workers in the United States to lose their jobs. 
A) the total value of goods and services produced by the United States to fall. 
B) wages in Mexico to rise. 
C) highly skilled workers in the United States to lose their jobs. 
D) unskilled workers in the United States to lose their jobs.

Question 5

The figure below shows Avery's weekly production possibilities curve for scarves.   Avery's PPC would shift outward if she:

Accepted Answer

A) knits more red scarves and fewer blue scarves each week. 
B) devotes less time to knitting each week. 
C) devotes more time to knitting each week. 
D) knits fewer red scarves and more blue scarves each week. 
A) knits more red scarves and fewer blue scarves each week. 
B) devotes less time to knitting each week. 
C) devotes more time to knitting each week. 
D) knits fewer red scarves and more blue scarves each week.

Question 6

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table:   Based on last month's data, Larry's opportunity cost of selling a truck is selling:

Accepted Answer

A) 10 cars. 
B) 1/2 of a car. 
C) 1 car. 
D) 2 cars. 
A) 10 cars. 
B) 1/2 of a car. 
C) 1 car. 
D) 2 cars.

Question 7

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

Accepted Answer

A) Les has a comparative advantage in producing pants. 
B) Les has an absolute advantage in producing pants. 
C) Eva has a comparative advantage in producing pants. 
D) Les has both comparative and absolute advantage in producing pants. 
A) Les has a comparative advantage in producing pants. 
B) Les has an absolute advantage in producing pants. 
C) Eva has a comparative advantage in producing pants. 
D) Les has both comparative and absolute advantage in producing pants.

Question 8

The figure below shows Becky's daily production possibilities curve for dresses and skirts.   Relative to point X, at point Y:

Accepted Answer

A) more dresses and more skirts are produced. 
B) more skirts and fewer dresses are produced. 
C) more dresses and fewer skirts are produced. 
D) fewer skirts and fewer dresses are produced. 
A) more dresses and more skirts are produced. 
B) more skirts and fewer dresses are produced. 
C) more dresses and fewer skirts are produced. 
D) fewer skirts and fewer dresses are produced.

Question 9

All else equal, the jobs that are the least likely to be outsourced are those that:

Accepted Answer

A) do not involve face­to­face contact. 
B) can be done by a computer. 
C) require face­to­face communication. 
D) can be broken down into series of well­defined steps. 
A) do not involve face­to­face contact. 
B) can be done by a computer. 
C) require face­to­face communication. 
D) can be broken down into series of well­defined steps.

Question 10

One reason there is political opposition to international trade is that:

Accepted Answer

A) the potential gains from specialization and trade are small. 
B) trade does not increase the total value of goods and services produced by a nation. 
C) the differences in opportunity costs between countries are small. 
D) not everyone benefits from trade. 
A) the potential gains from specialization and trade are small. 
B) trade does not increase the total value of goods and services produced by a nation. 
C) the differences in opportunity costs between countries are small. 
D) not everyone benefits from trade.

Question 11

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

Accepted Answer

A) must be on the production possibilities curve. 
B) must be an inefficient point. 
C) must be an efficient point. 
D) could be either an inefficient or efficient point. 
A) must be on the production possibilities curve. 
B) must be an inefficient point. 
C) must be an efficient point. 
D) could be either an inefficient or efficient point.

Question 12

As the differences in opportunity costs between the U.S.and its trading partners increase, the potential gains from specialization and trade ______.

Accepted Answer

A) increase 
B) decrease 
C) stay the same 
D) become unpredictable 
A) increase 
B) decrease 
C) stay the same 
D) become unpredictable

Question 13

You are the Minister of Trade for a small island country with the following annual PPC:   You are negotiating a trade agreement with a neighboring island with the following annual PPC:
  As soon as you see the other island's PPC, you realize there are:

Accepted Answer

A) no gains from trade because your both have the same comparative advantage. 
B) no gains from trade because there is no difference in your ability to harvest coconuts. 
C) no gains from trade because the other island has an absolute advantage. 
D) gains from trade because your island has a comparative advantage in coconuts. 
A) no gains from trade because your both have the same comparative advantage. 
B) no gains from trade because there is no difference in your ability to harvest coconuts. 
C) no gains from trade because the other island has an absolute advantage. 
D) gains from trade because your island has a comparative advantage in coconuts.

Question 14

The Principle of Increasing Opportunity Costs states that:

Accepted Answer

A) productive people do the hardest tasks first. 
B) when increasing production, resources with the lowest opportunity costs should be used first. 
C) when increasing production, resources with the lowest opportunity costs should be used last. 
D) opportunity costs increase when too little is produceD.This principle is also known as the Low­Hanging­Fruit Principle: take advantage of your least­cost opportunities first. 
A) productive people do the hardest tasks first. 
B) when increasing production, resources with the lowest opportunity costs should be used first. 
C) when increasing production, resources with the lowest opportunity costs should be used last. 
D) opportunity costs increase when too little is produceD.This principle is also known as the Low­Hanging­Fruit Principle: take advantage of your least­cost opportunities first.

Question 15

The figure below shows the production possibilities curve for the island of Genovia:   If 500 cars are produced in Genovia, a maximum of ______ tons of agricultural products can be produced.

Accepted Answer

A) 50,000 
B) 25,000 
C) 45,000 
D) 40,000 
A) 50,000 
B) 25,000 
C) 45,000 
D) 40,000

Question 16

The figure below shows Becky's daily production possibilities curve for dresses and skirts.   Point T is:

Accepted Answer

A) attainable 
B) efficient 
C) both attainable and efficient 
D) neither attainable nor efficient 
A) attainable 
B) efficient 
C) both attainable and efficient 
D) neither attainable nor efficient

Question 17

Moe divides his time between studying Physics and studying Economics.His production possibilities curve for his final grade in each class is shown below.   Moe needs to earn at least an 80 in both economics and physics to keep his scholarship.Given his current PPC, an 80 in both classes is ______.

Accepted Answer

A) unattainable 
B) attainable 
C) efficient 
D) inefficient 
A) unattainable 
B) attainable 
C) efficient 
D) inefficient

Question 18

Refer to the figure below.The opportunity cost of producing one bushel of wheat is:

Accepted Answer

A) 2 bushels of corn. 
B) ½ of a bushel of corn. 
C) 1,000 bushels of corn. 
D) 500 bushels of corn. 
A) 2 bushels of corn. 
B) ½ of a bushel of corn. 
C) 1,000 bushels of corn. 
D) 500 bushels of corn.

Question 19

Refer to the figure below.If Pat and Chris were to specialize in the task in which each has a comparative advantage:

Accepted Answer

A) Chris would plant bulbs and Pat would remove trash. 
B) Chris would remove trash and Pat would plant bulbs. 
C) Pat and Chris would each spend half of their time each task. 
D) both Pat and Chris would plant bulbs because they both have an absolute advantage in that task. 
A) Chris would plant bulbs and Pat would remove trash. 
B) Chris would remove trash and Pat would plant bulbs. 
C) Pat and Chris would each spend half of their time each task. 
D) both Pat and Chris would plant bulbs because they both have an absolute advantage in that task.

Question 20

The United States generally has a comparative advantage in the development of technology because it has:

Accepted Answer

A) large amounts of natural resources. 
B) a disproportionate share of the world's best research universities. 
C) the greatest need for new technology. 
D) patent laws, which no other country has. 
A) large amounts of natural resources. 
B) a disproportionate share of the world's best research universities. 
C) the greatest need for new technology. 
D) patent laws, which no other country has.

Refer to the table below.According to the table, Martha has the absolute advantage in:

Larry has a comparative advantage over his classmates in writing term papers if he:

Which of the following statements is true?

One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:

The figure below shows Avery's weekly production possibilities curve for scarves. Avery's PPC would shift outward if she:

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Larry's opportunity cost of selling a truck is selling:

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Relative to point X, at point Y:

All else equal, the jobs that are the least likely to be outsourced are those that:

One reason there is political opposition to international trade is that:

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

As the differences in opportunity costs between the U.S.and its trading partners increase, the potential gains from specialization and trade ______.

You are the Minister of Trade for a small island country with the following annual PPC: You are negotiating a trade agreement with a neighboring island with the following annual PPC: As soon as you see the other island's PPC, you realize there are:

The Principle of Increasing Opportunity Costs states that:

The figure below shows the production possibilities curve for the island of Genovia: If 500 cars are produced in Genovia, a maximum of ______ tons of agricultural products can be produced.

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Point T is:

Moe divides his time between studying Physics and studying Economics.His production possibilities curve for his final grade in each class is shown below. Moe needs to earn at least an 80 in both economics and physics to keep his scholarship.Given his current PPC, an 80 in both classes is ______.

Refer to the figure below.The opportunity cost of producing one bushel of wheat is:

Refer to the figure below.If Pat and Chris were to specialize in the task in which each has a comparative advantage:

The United States generally has a comparative advantage in the development of technology because it has:

Thinking Like an Economist

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 2: Comparative Advantage

Refer to the table below.According to the table, Martha has the absolute advantage in:

Larry has a comparative advantage over his classmates in writing term papers if he:

Which of the following statements is true?

One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:

The figure below shows Avery's weekly production possibilities curve for scarves. Avery's PPC would shift outward if she:

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Larry's opportunity cost of selling a truck is selling:

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Relative to point X, at point Y:

All else equal, the jobs that are the least likely to be outsourced are those that:

One reason there is political opposition to international trade is that:

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

As the differences in opportunity costs between the U.S.and its trading partners increase, the potential gains from specialization and trade ______.

You are the Minister of Trade for a small island country with the following annual PPC: You are negotiating a trade agreement with a neighboring island with the following annual PPC: As soon as you see the other island's PPC, you realize there are:

The Principle of Increasing Opportunity Costs states that:

The figure below shows the production possibilities curve for the island of Genovia: If 500 cars are produced in Genovia, a maximum of ______ tons of agricultural products can be produced.

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Point T is:

Moe divides his time between studying Physics and studying Economics.His production possibilities curve for his final grade in each class is shown below. Moe needs to earn at least an 80 in both economics and physics to keep his scholarship.Given his current PPC, an 80 in both classes is ______.

Refer to the figure below.The opportunity cost of producing one bushel of wheat is:

Refer to the figure below.If Pat and Chris were to specialize in the task in which each has a comparative advantage:

The United States generally has a comparative advantage in the development of technology because it has:

Thinking Like an Economist

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters