Question 1

Nguyen manages a supply chain team. If she uses the concept of comparative advantage for assigning tasks to members of her team, then

Accepted Answer

A) the team's output will consist of a wide range of goods. 
B) the team's output will vary more in quality. 
C) more can be accomplished. 
D) less will be accomplished. 
A) the team's output will consist of a wide range of goods. 
B) the team's output will vary more in quality. 
C) more can be accomplished. 
D) less will be accomplished.

Question 2

(Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Colombia has a comparative advantage in the production of:
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 $$\begin{array}{l}
\text { Table: Matcha Tea and Coho Salmon }\
\begin{array} { | l | l | l | } 
\hline & \text { Matcha Tea } & \text { Coho Salmon } \
\hline \text { Colombia } & 40 & 20 \
\hline \text { Washington } & 10 & 10 \
\hline
\end{array}
\end{array}$$

Accepted Answer

A) matcha tea only. 
B) Coho salmon only. 
C) both matcha tea and Coho salmon. 
D) neither matcha tea nor Coho salmon 
A) matcha tea only. 
B) Coho salmon only. 
C) both matcha tea and Coho salmon. 
D) neither matcha tea nor Coho salmon

Question 3

Marta's family buys a dozen eggs each week. The price of a dozen eggs rises from $2 to $3. In response to this, Marta's family starts to buy eggs every two weeks instead of every week. This is an example of price functioning as

Accepted Answer

A) a currency. 
B) an incentive. 
C) a bundle of information. 
D) a signal. 
A) a currency. 
B) an incentive. 
C) a bundle of information. 
D) a signal.

Question 4

The person who has an absolute advantage in a task

Accepted Answer

A) can perform the task at a lower opportunity cost than anyone else. 
B) is the person who should do the task. 
C) can perform the task at a higher opportunity cost than anyone else. 
D) is the one who is best at the task. 
A) can perform the task at a lower opportunity cost than anyone else. 
B) is the person who should do the task. 
C) can perform the task at a higher opportunity cost than anyone else. 
D) is the one who is best at the task.

Question 5

(Table : Fazio and Gabriella's opportunity cost) The table provides data on how long it takes Fazio and Gabriella each to learn to play a particular new song on the piano and to complete a given person's tax return. Use the data to answer the question.
Which statement explains who has a comparative advantage in learning a new song?

Accepted Answer

A) Fazio because he learns a new song more quickly than Gabriella. 
B) Gabriella because she can learn the song more quickly than Fazio. 
C) Fazio because he gives up fewer completed tax returns when he learns a new song. 
D) Gabriella because she gives up fewer completed tax returns when she learns a new song. 
A) Fazio because he learns a new song more quickly than Gabriella. 
B) Gabriella because she can learn the song more quickly than Fazio. 
C) Fazio because he gives up fewer completed tax returns when he learns a new song. 
D) Gabriella because she gives up fewer completed tax returns when she learns a new song.

Question 6

When price functions as a communication line between buyers and sellers around the world, it is functioning as

Accepted Answer

A) an incentive. 
B) a substitute for money. 
C) a signal. 
D) a bundle of information. 
A) an incentive. 
B) a substitute for money. 
C) a signal. 
D) a bundle of information.

Question 7

How do competitive markets help economies capture the gains available through trade?

Accepted Answer

The answer of How do competitive markets help economies capture...

Question 8

(Table: Cooking time). The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry.
Marla's opportunity cost of making lasagna is _____, and Jason's opportunity cost is _____.

Accepted Answer

A) .75 of an hour; .33 of an hour 
B) .75 of a chicken curry; .33 of a chicken curry 
C) 1.33 hours; three hours 
D) 1.33 chicken curries; three chicken curries 
A) .75 of an hour; .33 of an hour 
B) .75 of a chicken curry; .33 of a chicken curry 
C) 1.33 hours; three hours 
D) 1.33 chicken curries; three chicken curries

Question 9

(Table: Four persons) The table lists the minutes that it will take four persons to wash a car and to sort and fold a load of laundry. Use the data to answer the question.
What is Junko's opportunity cost for washing a car?

Accepted Answer

A) 0.42 of a load of laundry will not be sorted and folded. 
B) 2.4 loads of laundry will not be sorted and folded. 
C) 70 minutes will be given up. 
D) 50 minutes will be given up. 
A) 0.42 of a load of laundry will not be sorted and folded. 
B) 2.4 loads of laundry will not be sorted and folded. 
C) 70 minutes will be given up. 
D) 50 minutes will be given up.

Question 10

(Table: Joachim and Zane's opportunity cost) The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home.
Joachim's opportunity cost for cleaning bathrooms is _____, and Zane's opportunity cost for cleaning bathrooms is _____.

Accepted Answer

A) the windows washed 2.5 times; the windows washed two times 
B) .4 of the windows washed; .5 of the windows washed 
C) the windows washed 10 times; the windows washed six times 
D) .75 of the windows washed; .6 of the windows washed 
A) the windows washed 2.5 times; the windows washed two times 
B) .4 of the windows washed; .5 of the windows washed 
C) the windows washed 10 times; the windows washed six times 
D) .75 of the windows washed; .6 of the windows washed

Question 11

(Table: Fazio and Gabriella's opportunity cost) The table provides data on how long it takes Fazio and Gabriella to learn to play a particular new song on the piano and to complete a given person's tax return. Use the data to answer the question.
Fazio's opportunity cost of learning the song is _____, and Gabriella's opportunity cost is _____.

Accepted Answer

A) two tax returns; 1.25 tax returns 
B) .5 of a tax return; .8 of a tax return 
C) nine hours; two hours 
D) .8 of an hour; .5 of an hour 
A) two tax returns; 1.25 tax returns 
B) .5 of a tax return; .8 of a tax return 
C) nine hours; two hours 
D) .8 of an hour; .5 of an hour

Question 12

Mana has a comparative advantage in baking cakes. This means that she

Accepted Answer

A) produces better-quality cakes than any other cake baker. 
B) has more education than other cake bakers. 
C) can bake a cake using fewer resources than any other baker. 
D) gives up less to bake a cake than other bakers give up to bake a cake. 
A) produces better-quality cakes than any other cake baker. 
B) has more education than other cake bakers. 
C) can bake a cake using fewer resources than any other baker. 
D) gives up less to bake a cake than other bakers give up to bake a cake.

Question 13

When a manager uses comparative advantage to assign tasks in a workplace, then each

Accepted Answer

A) task is assigned to the worker who is best at doing the task. 
B) worker is assigned to the tasks for which he or she has the highest aptitude and efficiency. 
C) worker learns how to do all tasks to increase flexibility in assignments. 
D) task is assigned to the worker with the lowest opportunity cost for performing the task. 
A) task is assigned to the worker who is best at doing the task. 
B) worker is assigned to the tasks for which he or she has the highest aptitude and efficiency. 
C) worker learns how to do all tasks to increase flexibility in assignments. 
D) task is assigned to the worker with the lowest opportunity cost for performing the task.

Question 14

Price is functioning as a signal when it

Accepted Answer

A) is a line of communication between buyers and sellers in a market. 
B) creates incentives for changes in production and consumption. 
C) broadcasts useful information. 
D) summarizes all that is happening in the market. 
A) is a line of communication between buyers and sellers in a market. 
B) creates incentives for changes in production and consumption. 
C) broadcasts useful information. 
D) summarizes all that is happening in the market.

Question 15

Many buyers and sellers participate in the rice market. All their decisions in the rice market lead to the market equilibrium price. This describes which function of price?

Accepted Answer

A) Price provides signals. 
B) Price creates incentives. 
C) Price leads to inventions. 
D) Price aggregates information. 
A) Price provides signals. 
B) Price creates incentives. 
C) Price leads to inventions. 
D) Price aggregates information.

Question 16

Which of the following is a TRUE statement about work assignments based on comparative advantage?

Accepted Answer

A) The person who is fastest at a task should be assigned to perform it. 
B) Absolute advantage in the task should be the basis for making task assignments. 
C) Workers should be cross-trained as generalists and should not be specialists. 
D) The person with the lowest opportunity cost at a task should perform it. 
A) The person who is fastest at a task should be assigned to perform it. 
B) Absolute advantage in the task should be the basis for making task assignments. 
C) Workers should be cross-trained as generalists and should not be specialists. 
D) The person with the lowest opportunity cost at a task should perform it.

Question 17

Price is functioning as an incentive when a price change

Accepted Answer

A) communicates that the market is changing. 
B) causes people to have higher incomes. 
C) provides information about the state of the market. 
D) causes buyers and sellers to change their behavior. 
A) communicates that the market is changing. 
B) causes people to have higher incomes. 
C) provides information about the state of the market. 
D) causes buyers and sellers to change their behavior.

Question 18

When resources are organized according to the principle of comparative advantage, producers become

Accepted Answer

A) more specialized so they can trade and end up with more of everything. 
B) less specialized so they can trade and end up with more of everything. 
C) more specialized but can end up with less of everything. 
D) less specialized and can end up with less of everything. 
A) more specialized so they can trade and end up with more of everything. 
B) less specialized so they can trade and end up with more of everything. 
C) more specialized but can end up with less of everything. 
D) less specialized and can end up with less of everything.

Question 19

(Table: Time taken to clean). The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Who has a comparative advantage in cleaning bathrooms and why?

Accepted Answer

A) Zane because he has absolute advantage in cleaning bathrooms. 
B) Joachim because he has absolute advantage in cleaning bathrooms. 
C) Zane because he has a lower opportunity cost in cleaning bathrooms. 
D) Joachim because he has a lower opportunity cost in cleaning bathrooms. 
A) Zane because he has absolute advantage in cleaning bathrooms. 
B) Joachim because he has absolute advantage in cleaning bathrooms. 
C) Zane because he has a lower opportunity cost in cleaning bathrooms. 
D) Joachim because he has a lower opportunity cost in cleaning bathrooms.

Question 20

(Table: Four individuals )The table lists the hours that it will take four individuals to clean out a garage and to trim a property's hedges.
Who has a comparative advantage in cleaning out the garage?

Accepted Answer

A) Frank 
B) Matt 
C) Amy 
D) Jane 
A) Frank 
B) Matt 
C) Amy 
D) Jane

Exam 8: Gains From Trade

Nguyen manages a supply chain team. If she uses the concept of comparative advantage for assigning tasks to members of her team, then

Marta's family buys a dozen eggs each week. The price of a dozen eggs rises from $2 to $3. In response to this, Marta's family starts to buy eggs every two weeks instead of every week. This is an example of price functioning as

The person who has an absolute advantage in a task

When price functions as a communication line between buyers and sellers around the world, it is functioning as

How do competitive markets help economies capture the gains available through trade?

(Table: Cooking time). The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry. Marla's opportunity cost of making lasagna is _____, and Jason's opportunity cost is _____.

(Table: Four persons) The table lists the minutes that it will take four persons to wash a car and to sort and fold a load of laundry. Use the data to answer the question. What is Junko's opportunity cost for washing a car?

(Table: Joachim and Zane's opportunity cost) The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Joachim's opportunity cost for cleaning bathrooms is _____, and Zane's opportunity cost for cleaning bathrooms is _____.

Mana has a comparative advantage in baking cakes. This means that she

When a manager uses comparative advantage to assign tasks in a workplace, then each

Price is functioning as a signal when it

Many buyers and sellers participate in the rice market. All their decisions in the rice market lead to the market equilibrium price. This describes which function of price?

Which of the following is a TRUE statement about work assignments based on comparative advantage?

Price is functioning as an incentive when a price change

When resources are organized according to the principle of comparative advantage, producers become

(Table: Time taken to clean). The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Who has a comparative advantage in cleaning bathrooms and why?

(Table: Four individuals )The table lists the hours that it will take four individuals to clean out a garage and to trim a property's hedges. Who has a comparative advantage in cleaning out the garage?

The Core Principles of Economics

Demand: Thinking Like a Buyer

Supply: Thinking Like a Seller

Equilibrium: Where Supply Meets Demand

Elasticity: Measuring Responsiveness

When Governments Intervene in Markets

Welfare and Efficiency

International Trade

Externalities and Public Goods

Labor Demand and Supply

Wages, Workers, and Management

Inequality, Social Insurance, and Redistribution

Market Structure and Market Power

Entry, Exit, and Long-Run Profitability

Business Strategy

Sophisticated Pricing Strategies

Game Theory and Strategic Choices

Decisions Involving Uncertainty

Decisions With Private Information

Sizing up the Economy Using Gdp

Economic Growth

Unemployment

Inflation and Money

Consumption and Saving

Investment

The Financial Sector

International Finance and the Exchange Rate

Business Cycles

IS-MP Analysis: Interest Rates and Output

Phillips Curve

The Fed Model: Linking Interest Rates, Output, and Inflation

Aggregate Demand and Aggregate Supply

Monetary Policy

Government Spending, Taxes, and Fiscal Policy

Appendix: Aggregate Expenditure and the Multiplier

Filters

(Table: Cooking time). The table provides data on how long it takes Marla and Jason to cook lasagna and cook chicken curry. Marla's opportunity cost of making lasagna is _, and Jason's opportunity cost is _.

(Table: Joachim and Zane's opportunity cost) The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Joachim's opportunity cost for cleaning bathrooms is _, and Zane's opportunity cost for cleaning bathrooms is _.