Question 1

How does the discovery of new resources affect trade patterns around the world?

Accepted Answer

Discovery of new resources often change

Question 2

What is a seller's opportunity cost?

Accepted Answer

A seller's opportunity cost is

Question 3

Tim's opportunity cost of selling his car is $20,000.Rebecca, who is a likely buyer, values that car at $25,000.Calculate the economic value this transaction can create if Rebecca pays $23,500 for Tim's car.

Accepted Answer

A) $1,500 
B) $5,000 
C) $3,500 
D) $2,000 
A) $1,500 
B) $5,000 
C) $3,500 
D) $2,000

Question 4

What are the three major forms of governance and what are their dimensions?

Accepted Answer

Transactions take place under governance

Question 5

In the example of Ireland described in the text, the country's production set shifted outward over time because:

Accepted Answer

A) of technological advancements which improved its potato cultivation and overall agricultural production. 
B) it gained new resources over time which enabled it to specialize and gain comparative advantage in software trade with the U.S.and Europe. 
C) of new resources which allowed it to gain absolute advantage over many of its trading partners. 
D) of reduction in trade barriers with the European Union. 
A) of technological advancements which improved its potato cultivation and overall agricultural production. 
B) it gained new resources over time which enabled it to specialize and gain comparative advantage in software trade with the U.S.and Europe. 
C) of new resources which allowed it to gain absolute advantage over many of its trading partners. 
D) of reduction in trade barriers with the European Union.

Question 6

What are the conditions that an exchange must satisfy in order to make two individuals participate in it?

Accepted Answer

Two individuals or parties will enter in

Question 7

Hoe does etiquette help in transaction of goods between two parties?

Accepted Answer

Etiquette is an economic institution tha

Question 8

Which of the following statements is true about the trends in the flow of international trade witnessed in India since its independence?

Accepted Answer

A) Trade liberalization was unable to boost India's economy in the first few decades of independence. 
B) Indian software exports now reflect an annual growth rate of an impressive 55 percent. 
C) The opening of trade and modern telecommunications allowed India's production set to expand and gain comparative advantage in software. 
D) Trade has enabled Indian engineers to command higher wages than most other nations specializing in software. 
A) Trade liberalization was unable to boost India's economy in the first few decades of independence. 
B) Indian software exports now reflect an annual growth rate of an impressive 55 percent. 
C) The opening of trade and modern telecommunications allowed India's production set to expand and gain comparative advantage in software. 
D) Trade has enabled Indian engineers to command higher wages than most other nations specializing in software.

Question 9

Transaction costs reduce the benefit accruing to the parties involved in an exchange.Explain why.

Accepted Answer

Transaction costs reduce benef

Question 10

Fiona and Alicia divide their time equally between ironing shirts and cooking meals.Fiona can iron 5 shirts and cook 2 meals in an hour.Alicia can iron 6 shirts and cook 1 meal in an hour.If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?

Accepted Answer

A) Fiona should do all the work. 
B) Alicia should do all the work. 
C) Fiona should specialize in cooking meals and Alicia should specialize in ironing shirts. 
D) Alicia should specialize in cooking meals and Fiona should specialize in ironing shirts. 
A) Fiona should do all the work. 
B) Alicia should do all the work. 
C) Fiona should specialize in cooking meals and Alicia should specialize in ironing shirts. 
D) Alicia should specialize in cooking meals and Fiona should specialize in ironing shirts.

Question 11

Explain the significance of economic institutions in international trade.

Accepted Answer

Economic institutions define the environ

Question 12

If a country has absolute advantage in the production of all goods, then it will have no incentive to trade.

Accepted Answer

A) True 
 B)False

Question 13

The lowest price Jacob will accept from Harold for a bushel of corn produced in his farm is $5.The transaction will go through if:

Accepted Answer

A) Harold's valuation is less than Jacob's. 
B) Harold's valuation is greater than $5. 
C) Jacob's opportunity cost is greater than Harold's. 
D) Jacob's opportunity cost is equal to Harold's. 
A) Harold's valuation is less than Jacob's. 
B) Harold's valuation is greater than $5. 
C) Jacob's opportunity cost is greater than Harold's. 
D) Jacob's opportunity cost is equal to Harold's.

Question 14

Brett, who is a chef, divides his time between fishing and cooking meals.His production set is described by the equation $x + 4 y = 15$ , where $x$ is the number of salmon he catches and y the number of meals he cooks.If Brett catches 5 salmon and cooks 2 meals,

Accepted Answer

A) he is overusing his resources. 
B) the result is economically efficient. 
C) the result is economically inefficient. 
D) he is achieving the best possible outcome. 
A) he is overusing his resources. 
B) the result is economically efficient. 
C) the result is economically inefficient. 
D) he is achieving the best possible outcome.

Question 15

Standardized goods and services sold in the market are likely to have high switch-over costs.

Accepted Answer

A) True 
 B)False

Question 16

The production of 1,000 shirts leaves an apparel manufacturer with a capacity to produce no more than 1,100 trousers during a month.This implies:

Accepted Answer

A) the production level is inefficient. 
B) that if the production of trousers is reduced, that of shirts will also decline. 
C) that a reallocation of resources may make previously unachievable outcomes achievable. 
D) the production level is efficient. 
A) the production level is inefficient. 
B) that if the production of trousers is reduced, that of shirts will also decline. 
C) that a reallocation of resources may make previously unachievable outcomes achievable. 
D) the production level is efficient.

Question 17

Which of the following is true about the U.S.trade with Ireland post-1990?

Accepted Answer

A) The U.S.became a net exporter of software to Ireland. 
B) Output of potato per acre doubled with the introduction of new techniques, making the U.S.a net exporter of potatoes to Ireland. 
C) The U.S.production set shifted inward and Ireland gained advantage in the production of both software and potatoes. 
D) Productivity growth in the U.S.software industry was higher despite the cost-shifting innovations witnessed Ireland. 
A) The U.S.became a net exporter of software to Ireland. 
B) Output of potato per acre doubled with the introduction of new techniques, making the U.S.a net exporter of potatoes to Ireland. 
C) The U.S.production set shifted inward and Ireland gained advantage in the production of both software and potatoes. 
D) Productivity growth in the U.S.software industry was higher despite the cost-shifting innovations witnessed Ireland.

Question 18

Megan, an analyst in Ronald's team called in sick on a day when 4 projects were due for completion.Ronald divided Megan's work between the remaining six team-members.Which form of governance is being used here?

Accepted Answer

A) Etiquette 
B) Hierarchy 
C) Contract 
D) Market 
A) Etiquette 
B) Hierarchy 
C) Contract 
D) Market

Question 19

Trade between two parties is beneficial because:

Accepted Answer

A) it ensures that the standard of living in the poorer country matches its trading partner eventually. 
B) it enables each to consume a bundle of goods that it cannot produced domestically. 
C) it has an immediate effect on an economy by increasing its production set. 
D) it allows the economy of both trading partners to grow equally. 
A) it ensures that the standard of living in the poorer country matches its trading partner eventually. 
B) it enables each to consume a bundle of goods that it cannot produced domestically. 
C) it has an immediate effect on an economy by increasing its production set. 
D) it allows the economy of both trading partners to grow equally.

Question 20

Contracts are:

Accepted Answer

A) are command-based systems in which prices usually play a relatively small role. 
B) a set of promises intended to create economic value and enforceable by a court or some other agency, such as an arbitrator. 
C) are a mode of governance that facilitate the purchase and sale of standardized goods or services, often in repeated transactions. 
D) economic institutions that can greatly ease the process by which a transaction moves from proposal to commitment. 
A) are command-based systems in which prices usually play a relatively small role. 
B) a set of promises intended to create economic value and enforceable by a court or some other agency, such as an arbitrator. 
C) are a mode of governance that facilitate the purchase and sale of standardized goods or services, often in repeated transactions. 
D) economic institutions that can greatly ease the process by which a transaction moves from proposal to commitment.

How does the discovery of new resources affect trade patterns around the world?

What is a seller's opportunity cost?

Tim's opportunity cost of selling his car is $20,000.Rebecca, who is a likely buyer, values that car at $25,000.Calculate the economic value this transaction can create if Rebecca pays $23,500 for Tim's car.

What are the three major forms of governance and what are their dimensions?

In the example of Ireland described in the text, the country's production set shifted outward over time because:

What are the conditions that an exchange must satisfy in order to make two individuals participate in it?

Hoe does etiquette help in transaction of goods between two parties?

Which of the following statements is true about the trends in the flow of international trade witnessed in India since its independence?

Transaction costs reduce the benefit accruing to the parties involved in an exchange.Explain why.

Fiona and Alicia divide their time equally between ironing shirts and cooking meals.Fiona can iron 5 shirts and cook 2 meals in an hour.Alicia can iron 6 shirts and cook 1 meal in an hour.If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?

Explain the significance of economic institutions in international trade.

If a country has absolute advantage in the production of all goods, then it will have no incentive to trade.

The lowest price Jacob will accept from Harold for a bushel of corn produced in his farm is $5.The transaction will go through if:

Brett, who is a chef, divides his time between fishing and cooking meals.His production set is described by the equation $x + 4 y = 15$ , where $x$ is the number of salmon he catches and y the number of meals he cooks.If Brett catches 5 salmon and cooks 2 meals,

Standardized goods and services sold in the market are likely to have high switch-over costs.

The production of 1,000 shirts leaves an apparel manufacturer with a capacity to produce no more than 1,100 trousers during a month.This implies:

Which of the following is true about the U.S.trade with Ireland post-1990?

Megan, an analyst in Ronald's team called in sick on a day when 4 projects were due for completion.Ronald divided Megan's work between the remaining six team-members.Which form of governance is being used here?

Trade between two parties is beneficial because:

Contracts are:

Reasoning With Economics: Models and Information

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters

Exam 2: Transactions and Institutions: the Building Blocks

How does the discovery of new resources affect trade patterns around the world?

What is a seller's opportunity cost?

Tim's opportunity cost of selling his car is $20,000.Rebecca, who is a likely buyer, values that car at $25,000.Calculate the economic value this transaction can create if Rebecca pays $23,500 for Tim's car.

What are the three major forms of governance and what are their dimensions?

In the example of Ireland described in the text, the country's production set shifted outward over time because:

What are the conditions that an exchange must satisfy in order to make two individuals participate in it?

Hoe does etiquette help in transaction of goods between two parties?

Which of the following statements is true about the trends in the flow of international trade witnessed in India since its independence?

Transaction costs reduce the benefit accruing to the parties involved in an exchange.Explain why.

Fiona and Alicia divide their time equally between ironing shirts and cooking meals.Fiona can iron 5 shirts and cook 2 meals in an hour.Alicia can iron 6 shirts and cook 1 meal in an hour.If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?

Explain the significance of economic institutions in international trade.

If a country has absolute advantage in the production of all goods, then it will have no incentive to trade.

The lowest price Jacob will accept from Harold for a bushel of corn produced in his farm is $5.The transaction will go through if:

Brett, who is a chef, divides his time between fishing and cooking meals.His production set is described by the equation x+4y=15x + 4 y = 15x+4y=15 , where xxx is the number of salmon he catches and y the number of meals he cooks.If Brett catches 5 salmon and cooks 2 meals,

Standardized goods and services sold in the market are likely to have high switch-over costs.

The production of 1,000 shirts leaves an apparel manufacturer with a capacity to produce no more than 1,100 trousers during a month.This implies:

Which of the following is true about the U.S.trade with Ireland post-1990?

Megan, an analyst in Ronald's team called in sick on a day when 4 projects were due for completion.Ronald divided Megan's work between the remaining six team-members.Which form of governance is being used here?

Trade between two parties is beneficial because:

Contracts are:

Reasoning With Economics: Models and Information

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters

Brett, who is a chef, divides his time between fishing and cooking meals.His production set is described by the equation $x + 4 y = 15$ , where $x$ is the number of salmon he catches and y the number of meals he cooks.If Brett catches 5 salmon and cooks 2 meals,