Exam 2: Comparative Advantage

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In general,individuals and nations should specialize in producing goods _________ other individuals or nations.

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Pat has 4 hours to spend either studying for a test or playing a new video game.If Pat spends all of that time studying,Pat can score a 92 on the test.If Pat plays for 1 hour,Pat's test score falls 5 points.For playing a second hour,Pat's score falls by another 7 points.Playing for a third hour will lower Pat's score by another 10 points. Refer to the information above.The opportunity cost of the 2nd hour of playing the video game is:

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If a given production combination is efficient,then it must be:

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Earth Movers & Shakers operates 3 iron ore mines.This table shows their daily production rates and the current number of miners at each mine.All of the miners work for the same wage and each miner in any given mine produces the same number of tons as each other miner in that mine. Mine Tons Number of Miners Mother Lode 100 25 Scraping Bottom 30 10 Middle Drift 75 15 Refer to the table above.Earth Movers & Shakers needs to fill an order for 100 tons of ore in a single day,and has no other orders to fill that day.It should:

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The political concern expressed about the North American Free Trade Agreement (NAFTA)was that:

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Earth Movers & Shakers operates 3 iron ore mines.This table shows their daily production rates and the current number of miners at each mine.All of the miners work for the same wage and each miner in any given mine produces the same number of tons as each other miner in that mine. Mine Tons Number of Miners Mother Lode 100 25 Scraping Bottom 30 10 Middle Drift 75 15 Refer to the table above.The daily opportunity cost of moving one miner from Scraping Bottom to Middle Drift is:

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Lou and Alex live together and share household chores.They like to cook some meals ahead of time and eat leftovers.Suppose that in one hour Lou and Alex can do the following: Alex Lou Whole Hour Cleaning 3 rooms 5 rooms Whole Hour Cooking 3 meals 4 meals 1/2 hour, Each Activity 1.5 rooms; 1.5 meals 2.5 rooms; 2 meals Alex and Lou have worked out an efficient arrangement.Under that arrangement:

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The benefits to specialization are enhanced when two trading partners have:

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Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below. Computers 10 6 Calculators 100 120 Refer to the table above.Suppose Smith and Jones begin by producing 16 computers and 0 calculators per hour.If they wish to produce 14 computers and 40 calculators per hour,then Smith will spend __________ and Jones will spend __________.

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You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve: You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve:   You are negotiating a deal with a neighboring island that has the following annual PPC:   Refer to the figure above.Both islands specialize exclusively in the product for which they have a comparative advantage.You have agreed to sell the other island 350 coconuts in exchange for 1,300 fish.After the trade the other island has a total of _____ coconuts and _____ fish. You are negotiating a deal with a neighboring island that has the following annual PPC: You are the Minister of Trade for a small island country in the South Pacific with the following annual production possibilities curve:   You are negotiating a deal with a neighboring island that has the following annual PPC:   Refer to the figure above.Both islands specialize exclusively in the product for which they have a comparative advantage.You have agreed to sell the other island 350 coconuts in exchange for 1,300 fish.After the trade the other island has a total of _____ coconuts and _____ fish. Refer to the figure above.Both islands specialize exclusively in the product for which they have a comparative advantage.You have agreed to sell the other island 350 coconuts in exchange for 1,300 fish.After the trade the other island has a total of _____ coconuts and _____ fish.

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Large developed countries can produce more of practically everything than can small,less developed countries.Which of the following statements is true?

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If a producer is operating at an inefficient point on a production possibilities curve using currently available resources,that producer:

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Suppose that a further increase in specialization allows a country to increase total output by 10%,but afterward it was discovered that work absenteeism increased by 30%.This is likely an example of:

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Pat has 4 hours to spend either studying for a test or playing a new video game.If Pat spends all of that time studying,Pat can score a 92 on the test.If Pat plays for 1 hour,Pat's test score falls 5 points.For playing a second hour,Pat's score falls by another 7 points.Playing for a third hour will lower Pat's score by another 10 points. Refer to the information above.The opportunity cost of playing video games:

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Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Cars Sold Trucks Sold Larry 10 5 Joe 9 9 Ralph 3 12 ________ has an absolute advantage in selling cars and __________ has an absolute advantage in selling trucks.

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Moe divides his time between studying Physics and studying Economics.He has discovered that he can earn grades as shown on this production possibilities curve. Moe divides his time between studying Physics and studying Economics.He has discovered that he can earn grades as shown on this production possibilities curve.   Refer to the figure above.Which of the following is evidence that the low-hanging fruit principle applies to Moe's study habits? Refer to the figure above.Which of the following is evidence that the low-hanging fruit principle applies to Moe's study habits?

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In a two-person,two-good economy,the benefits of labor specialization will be larger when:

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In the long-run,if the production of all goods increases for a society (there is economic growth),it will cause the production possibility curve to:

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Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Cars Sold Trucks Sold Larry 10 5 Joe 9 9 Ralph 3 12 For Joe,the opportunity cost of selling a truck is:

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An inefficient point on a production possibilities curve is:

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