Question 1

The United States has a comparative advantage in producing books and movies because:

Accepted Answer

A)  New York and Hollywood are the historic centers of book publishing and movie production. 
B)  wages for workers who print books and make movies are lower in the United States than elsewhere. 
C)  the English language is understood by many people all over the world. 
D)  the United States gives generous tax breaks to publishers and movie producers. 
A)  New York and Hollywood are the historic centers of book publishing and movie production. 
B)  wages for workers who print books and make movies are lower in the United States than elsewhere. 
C)  the English language is understood by many people all over the world. 
D)  the United States gives generous tax breaks to publishers and movie producers.

Question 2

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. $$\begin{array} { | l | l | l | } 
\hline \text { Mine } & \text { Tons } & \begin{array} { l } 
\text { Number of } \
\text { Miners }
\end{array} \
\hline \text { Mother Lode } & 100 & 25 \
\hline \text { Scraping Bottom } & 30 & 10 \
\hline \text { Middle Drift } & 75 & 15 \
\hline
\end{array}$$
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:

Accepted Answer

A)  take it all from Mother Lode. 
B)  take 75 tons from Middle Drift and 25 tons from Mother Lode. 
C)  take 75 tons from Middle Drift and 25 tons from Scraping Bottom. 
D)  take 30 tons from Scraping Bottom and 70 tons from Mother Lode. 
A)  take it all from Mother Lode. 
B)  take 75 tons from Middle Drift and 25 tons from Mother Lode. 
C)  take 75 tons from Middle Drift and 25 tons from Scraping Bottom. 
D)  take 30 tons from Scraping Bottom and 70 tons from Mother Lode.

Question 3

According to the textbook,the evidence indicates that NAFTA has:

Accepted Answer

A)  reduced the wages of skilled workers in the United States. 
B)  reduced the employment of unskilled workers in the United States significantly. 
C)  stopped illegal immigration from Mexico. 
D)  not reduced the employment of unskilled workers in the United States. 
A)  reduced the wages of skilled workers in the United States. 
B)  reduced the employment of unskilled workers in the United States significantly. 
C)  stopped illegal immigration from Mexico. 
D)  not reduced the employment of unskilled workers in the United States.

Question 4

An existing comparative advantage can be further magnified by specialization because:

Accepted Answer

A)  it eliminates the need to switch from one task to another. 
B)  repetition results in boredom. 
C)  a variety of tasks will rise. 
D)  small tasks will be merged into larger tasks. 
A)  it eliminates the need to switch from one task to another. 
B)  repetition results in boredom. 
C)  a variety of tasks will rise. 
D)  small tasks will be merged into larger tasks.

Question 5

Generally,on a linear two-good production possibilities curve,the opportunity cost of the good measured on the vertical axis is:

Accepted Answer

A)  one minus the opportunity cost of the good measured on the horizontal axis. 
B)  the reciprocal of the opportunity cost of the good measured on the horizontal axis. 
C)  the slope of the production possibilities line. 
D)  the negative of the opportunity cost of the good measured on the horizontal axis. 
A)  one minus the opportunity cost of the good measured on the horizontal axis. 
B)  the reciprocal of the opportunity cost of the good measured on the horizontal axis. 
C)  the slope of the production possibilities line. 
D)  the negative of the opportunity cost of the good measured on the horizontal axis.

Question 6

If a point on a production possibilities curve is attainable:

Accepted Answer

A)  it must be efficient. 
B)  it might or might not be efficient. 
C)  it is efficient only if it does not exhaust all currently available resources. 
D)  it must completely exhaust all currently available resources. 
A)  it must be efficient. 
B)  it might or might not be efficient. 
C)  it is efficient only if it does not exhaust all currently available resources. 
D)  it must completely exhaust all currently available resources.

Question 7

The slope of the production possibilities curve must be:

Accepted Answer

A)  positive. 
B)  decreasing. 
C)  increasing. 
D)  negative. 
A)  positive. 
B)  decreasing. 
C)  increasing. 
D)  negative.

Question 8

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.Suppose Smith and Jones begin by producing 100 calculators per hour;as Smith and Jones choose to efficiently produce fewer computers and more calculators,__________ devotes more time to calculators because his __________.

Accepted Answer

A)  Smith;absolute advantage is larger 
B)  Jones;absolute advantage is smaller 
C)  Jones;opportunity costs are lower 
D)  Smith;opportunity costs are lower 
A)  Smith;absolute advantage is larger 
B)  Jones;absolute advantage is smaller 
C)  Jones;opportunity costs are lower 
D)  Smith;opportunity costs are lower

Question 9

The __________ the difference between domestic opportunity costs and international opportunity costs,the __________ the potential benefits of trading with other countries.

Accepted Answer

A)  smaller;greater 
B)  greater;greater 
C)  greater;smaller 
D)  larger;more insignificant 
A)  smaller;greater 
B)  greater;greater 
C)  greater;smaller 
D)  larger;more insignificant

Question 10

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.

Question 11

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: $$\begin{array} { | l | l | l | } 
\hline & \text { Cars Sold } & \text { Trucks Sold } \
\hline \text { Larry } & 10 & 5 \
\hline \text { Joe } & 9 & 9 \
\hline \text { Ralph } & 3 & 12 \
\hline
\end{array}$$
Joe's opportunity cost of selling a car is ______ than Ralph's,and Joe's opportunity cost of selling a car is ______ than Larry's.

Accepted Answer

A)  less;greater 
B)  greater;less 
C)  less;less 
D)  greater;greater 
A)  less;greater 
B)  greater;less 
C)  less;less 
D)  greater;greater

Question 12

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: $$\begin{array} { | l | l | l | } 
\hline & \text { Cars Sold } & \text { Trucks Sold } \
\hline \text { Larry } & 10 & 5 \
\hline \text { Joe } & 9 & 9 \
\hline \text { Ralph } & 3 & 12 \
\hline
\end{array}$$
______ should specialize in truck sales,and ______ should specialize in car sales.

Accepted Answer

A)  Joe;Ralph 
B)  Ralph;Larry 
C)  Larry;Ralph 
D)  Larry;Joe 
A)  Joe;Ralph 
B)  Ralph;Larry 
C)  Larry;Ralph 
D)  Larry;Joe

Question 13

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.Pat's PPC for test score versus hours playing a new video game is:

Accepted Answer

A)  upward-sloping. 
B)  downward-sloping. 
C)  first upward- and then downward-sloping. 
D)  first downward- and then upward-sloping. 
A)  upward-sloping. 
B)  downward-sloping. 
C)  first upward- and then downward-sloping. 
D)  first downward- and then upward-sloping.

Question 14

If a nation can produce a good more quickly than any other nation,that nation has a(n):

Accepted Answer

A)  comparative advantage. 
B)  absolute advantage. 
C)  relative advantage. 
D)  specialization advantage. 
A)  comparative advantage. 
B)  absolute advantage. 
C)  relative advantage. 
D)  specialization advantage.

Question 15

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 intercept on the test score axis of Pat's PPC is:

Accepted Answer

A)  100 
B)  92 
C)  5 hours 
D)  4 hours 
A)  100 
B)  92 
C)  5 hours 
D)  4 hours

Question 16

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. $$\begin{array} { | l | l | l | } 
\hline \text { Mine } & \text { Tons } & \begin{array} { l } 
\text { Number of } \
\text { Miners }
\end{array} \
\hline \text { Mother Lode } & 100 & 25 \
\hline \text { Scraping Bottom } & 30 & 10 \
\hline \text { Middle Drift } & 75 & 15 \
\hline
\end{array}$$
By taking the first tons from ______,Earth Movers & Shakers is producing consistent with the _____ Principle.

Accepted Answer

A)  Mother Lode;Low Hanging Fruit 
B)  Middle Drift;Compromise 
C)  Middle Drift;Low Hanging Fruit 
D)  Scraping Bottom;Cost Minimizing 
A)  Mother Lode;Low Hanging Fruit 
B)  Middle Drift;Compromise 
C)  Middle Drift;Low Hanging Fruit 
D)  Scraping Bottom;Cost Minimizing

Question 17

Which of the following jobs is least likely to be outsourced?

Accepted Answer

A)  Flipping hamburgers 
B)  Technical assistance over the phone for your computer 
C)  Transcription of physicians' records 
D)  Software design 
A)  Flipping hamburgers 
B)  Technical assistance over the phone for your computer 
C)  Transcription of physicians' records 
D)  Software design

Question 18

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.By coordinating their production decisions,the maximum number of computers Smith and Jones can produce in an hour is:

Accepted Answer

A)  120. 
B)  6. 
C)  16. 
D)  10. 
A)  120. 
B)  6. 
C)  16. 
D)  10.

Question 19

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.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 __________.

Accepted Answer

A)  1 hour on computers;40 minutes on computers and 20 minutes on calculators 
B)  1 hour on computers;20 minutes on computers and 40 minutes on calculators 
C)  30 minutes on each;30 minutes on each 
D)  45 minutes on computers and 15 on calculators;1 hour on calculators 
A)  1 hour on computers;40 minutes on computers and 20 minutes on calculators 
B)  1 hour on computers;20 minutes on computers and 40 minutes on calculators 
C)  30 minutes on each;30 minutes on each 
D)  45 minutes on computers and 15 on calculators;1 hour on calculators

Question 20

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

Accepted Answer

A)  that they can produce more quickly than 
B)  that they can produce less quickly than 
C)  for which they have a lower opportunity cost compared to 
D)  for which they have a higher opportunity cost compared to 
A)  that they can produce more quickly than 
B)  that they can produce less quickly than 
C)  for which they have a lower opportunity cost compared to 
D)  for which they have a higher opportunity cost compared to

The United States has a comparative advantage in producing books and movies because:

According to the textbook,the evidence indicates that NAFTA has:

An existing comparative advantage can be further magnified by specialization because:

Generally,on a linear two-good production possibilities curve,the opportunity cost of the good measured on the vertical axis is:

If a point on a production possibilities curve is attainable:

The slope of the production possibilities curve must be:

The the difference between domestic opportunity costs and international opportunity costs,the the potential benefits of trading with other countries.

In general,it is true that:

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 Joe's opportunity cost of selling a car is than Ralph's,and Joe's opportunity cost of selling a car is than Larry's.

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 should specialize in truck sales,and should specialize in car sales.

If a nation can produce a good more quickly than any other nation,that nation has a(n):

Which of the following jobs is least likely to be outsourced?

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.By coordinating their production decisions,the maximum number of computers Smith and Jones can produce in an hour is:

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

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

The United States has a comparative advantage in producing books and movies because:

According to the textbook,the evidence indicates that NAFTA has:

An existing comparative advantage can be further magnified by specialization because:

Generally,on a linear two-good production possibilities curve,the opportunity cost of the good measured on the vertical axis is:

If a point on a production possibilities curve is attainable:

The slope of the production possibilities curve must be:

The __________ the difference between domestic opportunity costs and international opportunity costs,the __________ the potential benefits of trading with other countries.

In general,it is true that:

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 Joe's opportunity cost of selling a car is ______ than Ralph's,and Joe's opportunity cost of selling a car is ______ than Larry's.

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 ______ should specialize in truck sales,and ______ should specialize in car sales.

If a nation can produce a good more quickly than any other nation,that nation has a(n):

Which of the following jobs is least likely to be outsourced?

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.By coordinating their production decisions,the maximum number of computers Smith and Jones can produce in an hour is:

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

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

The the difference between domestic opportunity costs and international opportunity costs,the the potential benefits of trading with other countries.

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 Joe's opportunity cost of selling a car is than Ralph's,and Joe's opportunity cost of selling a car is than Larry's.

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 should specialize in truck sales,and should specialize in car sales.