Question 1

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

Accepted Answer

A)  Heather; absolute 
B)  Eitan; absolute 
C)  Heather; positive 
D)  Heather; comparative 
E)  Eitan; comparative 
A)  Heather; absolute 
B)  Eitan; absolute 
C)  Heather; positive 
D)  Heather; comparative 
E)  Eitan; comparative

Question 2

One reason that economists make assumptions when designing models is to:

Accepted Answer

A)  exclude variables that do not add predictive power to the model. 
B)  make models more like the real world. 
C)  make models more complex. 
D)  increase internal factors. 
E)  ensure that all possible factors are included. 
A)  exclude variables that do not add predictive power to the model. 
B)  make models more like the real world. 
C)  make models more complex. 
D)  increase internal factors. 
E)  ensure that all possible factors are included.

Question 3

Consider the following scenario to answer the questions that follow.
On a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with blanks where you can calculate the opportunity cost.
  
-Who has an absolute advantage in spreading mulch?

Accepted Answer

A)  Zuckerberg has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch. 
B)  Gates has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch. 
C)  Zuckerberg has the advantage because he gives up more trees each time he spreads one cubic yard of mulch. 
D)  Neither has an absolute advantage in spreading mulch. 
E)  Both parties have an absolute advantage in planting trees. 
A)  Zuckerberg has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch. 
B)  Gates has the advantage because he gives up fewer trees each time he spreads one cubic yard of mulch. 
C)  Zuckerberg has the advantage because he gives up more trees each time he spreads one cubic yard of mulch. 
D)  Neither has an absolute advantage in spreading mulch. 
E)  Both parties have an absolute advantage in planting trees.

Question 4

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 questions that follow.
  
-Which statement best describes the absolute advantage shown in the figures?

Accepted Answer

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

Question 5

Why might LeBron James,a 6'8" National Basketball Association (NBA)player,hire professional movers to help him move,even though his size and strength likely make him more proficient (better)at furniture moving than the professionals he may hire?

Accepted Answer

Even today,LeBron James has certain occu

Question 6

Suppose that Sheldon and Leonard can either run errands or wash dishes.Their maximum output per hour is listed in the following table.Given the same quantity of resources,at what terms of trade (relative price ratio)could they specialize and trade so that both consume outside their own production possibilities frontiers (PPFs)?

Accepted Answer

A)  1 errand run per 75 dishes washed 
B)  1 errand run per 30 dishes washed 
C)  1 errand run per 12 dishes washed 
D)  1 errand run per 10 dishes washed 
E)  1 errand run per 6 dishes washed 
A)  1 errand run per 75 dishes washed 
B)  1 errand run per 30 dishes washed 
C)  1 errand run per 12 dishes washed 
D)  1 errand run per 10 dishes washed 
E)  1 errand run per 6 dishes washed

Question 7

Michael and Angelo 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 questions that follow.
  
-Does either Michael or Angelo have an absolute advantage?

Accepted Answer

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

Question 8

Consider the following scenario to answer the questions that follow.
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie.
-What is Joey's opportunity cost of baking a loaf of bread?

Accepted Answer

A)  4 pies 
B)  2 pies 
C)  1 pie 
D)  1 loaf of bread 
E)  1/2 loaf of bread 
A)  4 pies 
B)  2 pies 
C)  1 pie 
D)  1 loaf of bread 
E)  1/2 loaf of bread

Question 9

The process of examining a change in one variable in a model while assuming that all the other variables remain constant is called:

Accepted Answer

A)  external factors. 
B)  ceteris paribus. 
C)  normative analysis. 
D)  positive analysis. 
E)  faulty assumptions. 
A)  external factors. 
B)  ceteris paribus. 
C)  normative analysis. 
D)  positive analysis. 
E)  faulty assumptions.

Question 10

If Elaine can produce more output from a set amount of resources than Jerry can,you know that ________ has a(n)________ advantage.

Accepted Answer

A)  Elaine; comparative 
B)  Jerry; comparative 
C)  Elaine; absolute 
D)  Jerry; absolute 
E)  Elaine; normative 
A)  Elaine; comparative 
B)  Jerry; comparative 
C)  Elaine; absolute 
D)  Jerry; absolute 
E)  Elaine; normative

Question 11

You have an absolute advantage in producing something whenever:

Accepted Answer

A)  you enjoy producing that good. 
B)  you can produce more of it than someone else can using the same quantity of resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost is lower than that of other producers. 
E)  you have specific training in the production of that good. 
A)  you enjoy producing that good. 
B)  you can produce more of it than someone else can using the same quantity of resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost is lower than that of other producers. 
E)  you have specific training in the production of that good.

Question 12

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow.

-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 13

The important act of holding all other variables constant while examining a particular variable is known as:

Accepted Answer

A)  constraint. 
B)  a normative statement. 
C)  a positive statement. 
D)  macroeconomics. 
E)  ceteris paribus. 
A)  constraint. 
B)  a normative statement. 
C)  a positive statement. 
D)  macroeconomics. 
E)  ceteris paribus.

Question 14

Refer to the following figure for the questions that follow.
  
-The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is:

Accepted Answer

A)  2 blueberry pies. 
B)  14 apple pies. 
C)  7 blueberry pies. 
D)  4 apple pies. 
E)  2 apple pies. 
A)  2 blueberry pies. 
B)  14 apple pies. 
C)  7 blueberry pies. 
D)  4 apple pies. 
E)  2 apple pies.

Question 15

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 16

Which of the following is a normative statement?

Accepted Answer

A)  You should wear a helmet when cycling. 
B)  The sky is blue. 
C)  A bicycle has two wheels. 
D)  A unicycle has five wheels. 
E)  Electricity follows the path of least resistance. 
A)  You should wear a helmet when cycling. 
B)  The sky is blue. 
C)  A bicycle has two wheels. 
D)  A unicycle has five wheels. 
E)  Electricity follows the path of least resistance.

Question 17

Which of the following would be a consequence in an economy where there is no money?

Accepted Answer

A)  There would be no way to save for the future. 
B)  There would be no way to borrow. 
C)  Exchanges would occur more quickly. 
D)  Exchanges would take longer. 
E)  There would be no more exchange. 
A)  There would be no way to save for the future. 
B)  There would be no way to borrow. 
C)  Exchanges would occur more quickly. 
D)  Exchanges would take longer. 
E)  There would be no more exchange.

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

One reason that economists make assumptions when designing models is to:

Why might LeBron James,a 6'8" National Basketball Association (NBA)player,hire professional movers to help him move,even though his size and strength likely make him more proficient (better)at furniture moving than the professionals he may hire?

Michael and Angelo 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 questions that follow. -Does either Michael or Angelo have an absolute advantage?

The process of examining a change in one variable in a model while assuming that all the other variables remain constant is called:

If Elaine can produce more output from a set amount of resources than Jerry can,you know that has a(n) advantage.

You have an absolute advantage in producing something whenever:

The important act of holding all other variables constant while examining a particular variable is known as:

Refer to the following figure for the questions that follow. -The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is:

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

Which of the following is a normative statement?

Which of the following would be a consequence in an economy where there is no money?

Thinking Like an Economist

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Aggregate Demand and Aggregate Supply

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters

Exam 2: Economic Models and Gains From Trade

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

One reason that economists make assumptions when designing models is to:

Why might LeBron James,a 6'8" National Basketball Association (NBA)player,hire professional movers to help him move,even though his size and strength likely make him more proficient (better)at furniture moving than the professionals he may hire?

Michael and Angelo 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 questions that follow. -Does either Michael or Angelo have an absolute advantage?

The process of examining a change in one variable in a model while assuming that all the other variables remain constant is called:

If Elaine can produce more output from a set amount of resources than Jerry can,you know that ________ has a(n)________ advantage.

You have an absolute advantage in producing something whenever:

The important act of holding all other variables constant while examining a particular variable is known as:

Refer to the following figure for the questions that follow. -The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is:

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

Which of the following is a normative statement?

Which of the following would be a consequence in an economy where there is no money?

Thinking Like an Economist

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Aggregate Demand and Aggregate Supply

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters

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

If Elaine can produce more output from a set amount of resources than Jerry can,you know that has a(n) advantage.