Question 1

Refer to the figure below. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:

Accepted Answer

A) 800 warheads. 
B) 400 warheads. 
C) 200 warheads. 
D) 100 warheads. 
A) 800 warheads. 
B) 400 warheads. 
C) 200 warheads. 
D) 100 warheads.

Question 2

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 3

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 4

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 5

Refer to the table below. Martha's opportunity cost of making of a pie is: $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Time to } \
\text { Make a Pie }
\end{array} & \begin{array} { c } 
\text { Time to } \
\text { Make a Cake }
\end{array} \
\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \
\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \
\hline
\end{array}$$

Accepted Answer

A) 3/4 of a cake. 
B) 4/3 of a cake. 
C) 8 cakes. 
D) 80 cakes. 
A) 3/4 of a cake. 
B) 4/3 of a cake. 
C) 8 cakes. 
D) 80 cakes.

Question 6

In general, individuals and nations should specialize in producing those goods for which they have a(n):

Accepted Answer

A) absolute advantage. 
B) comparative advantage. 
C) absolutely comparative advantage. 
D) absolute advantage and a comparative advantage. 
A) absolute advantage. 
B) comparative advantage. 
C) absolutely comparative advantage. 
D) absolute advantage and a comparative advantage.

Question 7

Which of the following is NOT a reason why there are gains to specialization?

Accepted Answer

A) It eliminates many of the costs of switching from one task to another. 
B) It further improves skills through experience and practice. 
C) It increases the amount productive resources in the economy. 
D) It allows individuals to concentrate on the activities in which they have a comparative advantage. 
A) It eliminates many of the costs of switching from one task to another. 
B) It further improves skills through experience and practice. 
C) It increases the amount productive resources in the economy. 
D) It allows individuals to concentrate on the activities in which they have a comparative advantage.

Question 8

Refer to the table below. ______ has the comparative advantage in making pizza, and ______ has the comparative advantage in delivering pizza. $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Pizzas } \
\text { Made } \
\text { Per Hour }
\end{array} & \begin{array} { c } 
\text { Pizzas } \
\text { Delivered } \
\text { Per Hour }
\end{array} \
\hline \text { Corey } & 12 & 6 \
\hline \text { Pat } & 10 & 15 \
\hline
\end{array}$$

Accepted Answer

A) Corey; Corey 
B) Pat; Pat 
C) Pat; Corey 
D) Corey; Pat 
A) Corey; Corey 
B) Pat; Pat 
C) Pat; Corey 
D) Corey; Pat

Question 9

Refer to the figure below. The opportunity cost of increasing medical care from 200 to 400 units is ______ the opportunity cost of increasing medical care from 400 to 600 units.

Accepted Answer

A) greater than 
B) less than 
C) exactly the same as 
D) twice as much as 
A) greater than 
B) less than 
C) exactly the same as 
D) twice as much as

Question 10

Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown below.   According to Moe's PPC, moving from a 70 to an 80 in economics:

Accepted Answer

A) is inefficient. 
B) has a lower opportunity cost than moving from an 80 to a 90. 
C) is unattainable. 
D) has a higher opportunity cost than moving from an 80 to a 90. 
A) is inefficient. 
B) has a lower opportunity cost than moving from an 80 to a 90. 
C) is unattainable. 
D) has a higher opportunity cost than moving from an 80 to a 90.

Question 11

The emergence of English as the de facto world language has _____ a comparative advantage in the production of books, movies and popular music:

Accepted Answer

A) given English-speaking countries 
B) given non-English-speaking countries 
C) had no effect on which country has 
D) given all countries 
A) given English-speaking countries 
B) given non-English-speaking countries 
C) had no effect on which country has 
D) given all countries

Question 12

The benefits to specialization are even greater when two trading partners have:

Accepted Answer

A) absolute advantages in producing the same goods. 
B) similar consumption preferences. 
C) very similar opportunity costs. 
D) large differences in opportunity costs. 
A) absolute advantages in producing the same goods. 
B) similar consumption preferences. 
C) very similar opportunity costs. 
D) large differences in opportunity costs.

Question 13

Refer to the figure below. For Pat, the opportunity cost of removing one bag of trash is planting:

Accepted Answer

A) 100 bulbs. 
B) 5 bulbs. 
C) 1/100 of a bulb. 
D) 1/5 of a bulb. 
A) 100 bulbs. 
B) 5 bulbs. 
C) 1/100 of a bulb. 
D) 1/5 of a bulb.

Question 14

When a U.S. firm engages in outsourcing, it benefits ______ and harms ______.

Accepted Answer

A) the firm; the U.S.consumers of the firm's products 
B) the U.S.consumers of the firm's products; the firm 
C) the U.S.consumers of the firm's products; the firm's U.S.employees 
D) the U.S.consumers of the firm's products; the firm's foreign employees 
A) the firm; the U.S.consumers of the firm's products 
B) the U.S.consumers of the firm's products; the firm 
C) the U.S.consumers of the firm's products; the firm's U.S.employees 
D) the U.S.consumers of the firm's products; the firm's foreign employees

Question 15

The slope of a production possibilities curve is ______ because ______.

Accepted Answer

A) negative; producing more of one good requires producing less of the other 
B) negative; producing less of one good requires producing less of the other 
C) positive; producing more of one good requires producing more of the other 
D) positive; producing more of one good requires producing less of the other 
A) negative; producing more of one good requires producing less of the other 
B) negative; producing less of one good requires producing less of the other 
C) positive; producing more of one good requires producing more of the other 
D) positive; producing more of one good requires producing less of the other

Question 16

In a two-person, two-good economy, the gains to specialization will be larger when:

Accepted Answer

A) one person has an absolute advantage in both goods. 
B) neither person has an absolute advantage. 
C) there are small differences between the individuals in their opportunity costs of producing the two goods. 
D) there are large differences between the individuals in their opportunity costs of producing the two goods. 
A) one person has an absolute advantage in both goods. 
B) neither person has an absolute advantage. 
C) there are small differences between the individuals in their opportunity costs of producing the two goods. 
D) there are large differences between the individuals in their opportunity costs of producing the two goods.

Question 17

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Calculators } \
\text { Per Hour }
\end{array} & \begin{array} { c } 
\text { Computers } \
\text { Per Hour }
\end{array} \
\hline \text { Smith } & 100 & 10 \
\hline \text { Jones } & 120 & 6 \
\hline
\end{array}$$ If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators per hour, then Smith will ______ and Jones will ______.

Accepted Answer

A) split his time between computers and calculators; produce only calculators 
B) produce only calculators; split his time between computers and calculators 
C) produce only calculators; produce only computers 
D) produce only computers; produce only calculators 
A) split his time between computers and calculators; produce only calculators 
B) produce only calculators; split his time between computers and calculators 
C) produce only calculators; produce only computers 
D) produce only computers; produce only calculators

Refer to the figure below. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:

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:

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

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

Refer to the table below. Martha's opportunity cost of making of a pie is: Time to Make a Pie Time to Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes

In general, individuals and nations should specialize in producing those goods for which they have a(n):

Which of the following is NOT a reason why there are gains to specialization?

Refer to the table below. has the comparative advantage in making pizza, and has the comparative advantage in delivering pizza. Pizzas Made Per Hour Pizzas Delivered Per Hour Corey 12 6 Pat 10 15

Refer to the figure below. The opportunity cost of increasing medical care from 200 to 400 units is ______ the opportunity cost of increasing medical care from 400 to 600 units.

Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown below. According to Moe's PPC, moving from a 70 to an 80 in economics:

The emergence of English as the de facto world language has _____ a comparative advantage in the production of books, movies and popular music:

The benefits to specialization are even greater when two trading partners have:

Refer to the figure below. For Pat, the opportunity cost of removing one bag of trash is planting:

When a U.S. firm engages in outsourcing, it benefits and harms .

The slope of a production possibilities curve is because .

In a two-person, two-good economy, the gains to specialization will be larger when:

Thinking Like an Economist

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Filters

Exam 2: Comparative Advantage

Refer to the figure below. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:

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:

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

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

Refer to the table below. Martha's opportunity cost of making of a pie is: Time to Make a Pie Time to Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes

In general, individuals and nations should specialize in producing those goods for which they have a(n):

Which of the following is NOT a reason why there are gains to specialization?

Refer to the table below. ______ has the comparative advantage in making pizza, and ______ has the comparative advantage in delivering pizza. Pizzas Made Per Hour Pizzas Delivered Per Hour Corey 12 6 Pat 10 15

Refer to the figure below. The opportunity cost of increasing medical care from 200 to 400 units is ______ the opportunity cost of increasing medical care from 400 to 600 units.

Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown below. According to Moe's PPC, moving from a 70 to an 80 in economics:

The emergence of English as the de facto world language has _____ a comparative advantage in the production of books, movies and popular music:

The benefits to specialization are even greater when two trading partners have:

Refer to the figure below. For Pat, the opportunity cost of removing one bag of trash is planting:

When a U.S. firm engages in outsourcing, it benefits ______ and harms ______.

The slope of a production possibilities curve is ______ because ______.

In a two-person, two-good economy, the gains to specialization will be larger when:

Thinking Like an Economist

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities and Property Rights

The Economics of Information

Labor Markets, Poverty, and Income Distribution

The Environment, Health, and Safety

Public Goods and Tax Policy

Filters

Refer to the table below. has the comparative advantage in making pizza, and has the comparative advantage in delivering pizza. Pizzas Made Per Hour Pizzas Delivered Per Hour Corey 12 6 Pat 10 15

When a U.S. firm engages in outsourcing, it benefits and harms .

The slope of a production possibilities curve is because .