Question 1

The fundamental reason the production possibilities curve has a downward slope is:

Accepted Answer

A) workers are inefficient. 
B) resources are of low quality. 
C) resources are fixed and therefore tradeoffs must be made. 
D) it has empirical support but why it is so is still a mystery. 
A) workers are inefficient. 
B) resources are of low quality. 
C) resources are fixed and therefore tradeoffs must be made. 
D) it has empirical support but why it is so is still a mystery.

Question 2

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 3

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.Both of Moe's professors require at least a 65 to pass and a 90 to earn an A.After looking at his PPC,Moe realizes that:

Accepted Answer

A) he can pass both classes. 
B) he can pass economics,but only if he fails physics. 
C) he can pass physics,but only if he fails economics. 
D) he could earn an A in economics and still pass physics. 
A) he can pass both classes. 
B) he can pass economics,but only if he fails physics. 
C) he can pass physics,but only if he fails economics. 
D) he could earn an A in economics and still pass physics.

Question 4

The United States generally has a comparative advantage in the development of technology because of:

Accepted Answer

A) larger amounts of natural resources. 
B) a high concentration of the best research universities. 
C) tax incentives. 
D) the existence of patent law,which no other country provides. 
A) larger amounts of natural resources. 
B) a high concentration of the best research universities. 
C) tax incentives. 
D) the existence of patent law,which no other country provides.

Question 5

Between the U.S.and Nepal,Nepal invests less in new factories and equipment.This will likely cause:

Accepted Answer

A) Nepal's production possibilities curve to shift outward faster than the U.S.'s. 
B) The U.S.'s production possibilities curve to shift inward faster than Nepal's. 
C) The U.S.'s production possibilities curve to shift outward faster than Nepal's. 
D) Nepal's production possibilities curve to shift inward faster than the U.S's. 
A) Nepal's production possibilities curve to shift outward faster than the U.S.'s. 
B) The U.S.'s production possibilities curve to shift inward faster than Nepal's. 
C) The U.S.'s production possibilities curve to shift outward faster than Nepal's. 
D) Nepal's production possibilities curve to shift inward faster than the U.S's.

Question 6

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below. $\begin{array}{ccc}
\underline{\text { Good }}&\underline{\text { Smith }} & \underline{\text { Jones }} \
\text { Computers } & 10 & 6 \
\text { Calculators } & 100 & 120
\end{array}$
Refer to the table above.If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators per hour,Smith will __________ and Jones will __________.

Accepted Answer

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

Question 7

If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour,then it must be the case that:

Accepted Answer

A) Leslie has a comparative advantage. 
B) Leslie has an absolute advantage. 
C) Eva has a comparative advantage. 
D) Leslie has both comparative and absolute advantage. 
A) Leslie has a comparative advantage. 
B) Leslie has an absolute advantage. 
C) Eva has a comparative advantage. 
D) Leslie has both comparative and absolute advantage.

Question 8

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

Accepted Answer

A) production possibilities curve. 
B) consumption possibilities curve. 
C) production function. 
D) supply curve. 
A) production possibilities curve. 
B) consumption possibilities curve. 
C) production function. 
D) supply curve.

Question 9

In general,it is true that:

Accepted Answer

A) more specialization is always better. 
B) less specialization is always better. 
C) specialization imposes costs as well as benefits. 
D) more specialization is always worse. 
A) more specialization is always better. 
B) less specialization is always better. 
C) specialization imposes costs as well as benefits. 
D) more specialization is always worse.

The fundamental reason the production possibilities curve has a downward slope is:

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

The United States generally has a comparative advantage in the development of technology because of:

Between the U.S.and Nepal,Nepal invests less in new factories and equipment.This will likely cause:

If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour,then it must be the case that:

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

In general,it is true that:

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

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 2: Comparative Advantage

The fundamental reason the production possibilities curve has a downward slope is:

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

The United States generally has a comparative advantage in the development of technology because of:

Between the U.S.and Nepal,Nepal invests less in new factories and equipment.This will likely cause:

If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour,then it must be the case that:

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

In general,it is true that:

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

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Spending, Output, and Fiscal Policy

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters