Question 1

According to the textbook,the largest factor explaining the variance in the performance of the economies of the world is the:

Accepted Answer

A)  degree of specialization. 
B)  technological sophistication. 
C)  location of the country. 
D)  type of government. 
A)  degree of specialization. 
B)  technological sophistication. 
C)  location of the country. 
D)  type of government.

Question 2

The Principle of Increasing Opportunity Costs implies that:

Accepted Answer

A)  productive people do the hardest tasks first,while they are fresh. 
B)  to increase production,you should use the resources with the lowest opportunity cost first. 
C)  the cost-benefit principle does not apply to increasing productivity. 
D)  specialization increases productivity. 
A)  productive people do the hardest tasks first,while they are fresh. 
B)  to increase production,you should use the resources with the lowest opportunity cost first. 
C)  the cost-benefit principle does not apply to increasing productivity. 
D)  specialization increases productivity.

Question 3

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.The opportunity cost of making an extra calculator for Smith is __________ and for Jones it is __________.

Accepted Answer

A)  0.10 computers;0.05 computers 
B)  10 computers;6 computers 
C)  1 computer;0.5 computers 
D)  0.6 computers;1.2 computers 
A)  0.10 computers;0.05 computers 
B)  10 computers;6 computers 
C)  1 computer;0.5 computers 
D)  0.6 computers;1.2 computers

Question 4

Points that lie below the production possibilities curve are inefficient because:

Accepted Answer

A)  more of one or both goods could be produced using currently available resources without giving up production of another good. 
B)  producers are not specializing. 
C)  producers face scarcity. 
D)  too many goods are being produced. 
A)  more of one or both goods could be produced using currently available resources without giving up production of another good. 
B)  producers are not specializing. 
C)  producers face scarcity. 
D)  too many goods are being produced.

Question 5

Which of the following statements is always true?

Accepted Answer

A)  Absolute advantage implies comparative advantage. 
B)  Comparative advantage does not require absolute advantage. 
C)  Absolute advantage requires comparative advantage. 
D)  Comparative advantage requires absolute advantage. 
A)  Absolute advantage implies comparative advantage. 
B)  Comparative advantage does not require absolute advantage. 
C)  Absolute advantage requires comparative advantage. 
D)  Comparative advantage requires absolute advantage.

Question 6

The benefits of specialization can be used to explain why:

Accepted Answer

A)  workers prefer to work on a variety of tasks during the day. 
B)  machines are more productive than human workers. 
C)  trade can make both parties to the trade better off. 
D)  big companies take advantage of smaller ones. 
A)  workers prefer to work on a variety of tasks during the day. 
B)  machines are more productive than human workers. 
C)  trade can make both parties to the trade better off. 
D)  big companies take advantage of smaller ones.

Question 7

NAFTA helped ______ to exploit a comparative advantage in the production of goods made by unskilled labor.

Accepted Answer

A)  Canada 
B)  Cuba 
C)  Mexico 
D)  The USA 
A)  Canada 
B)  Cuba 
C)  Mexico 
D)  The USA

Question 8

Point A on a linear production possibilities curve represents a combination of 12 coffees and 3 cappuccinos,and point B represents 3 coffees and 6 cappuccinos.Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis.
The opportunity cost of a cup of coffee is:

Accepted Answer

A)  3 cappuccinos 
B)  9 cappuccinos 
C)  1/3 of a cappuccino 
D)  6 cappuccinos 
A)  3 cappuccinos 
B)  9 cappuccinos 
C)  1/3 of a cappuccino 
D)  6 cappuccinos

Question 9

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

Accepted Answer

A)  10 fewer cars sold. 
B)  1/2 car not sold. 
C)  1 fewer car sold. 
D)  2 fewer cars sold. 
A)  10 fewer cars sold. 
B)  1/2 car not sold. 
C)  1 fewer car sold. 
D)  2 fewer cars sold.

Question 10

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.

Accepted Answer

A)  850;1,200 
B)  500;1,200 
C)  350;1,500 
D)  350;1,200 
A)  850;1,200 
B)  500;1,200 
C)  350;1,500 
D)  350;1,200

Question 11

Point A on a linear production possibilities curve represents a combination of 12 coffees and 3 cappuccinos,and point B represents 3 coffees and 6 cappuccinos.Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis.
The absolute value of the slope of the production possibilities curve between points A and B equals:

Accepted Answer

A)  6 
B)  4 
C)  3 
D)  1/3 
A)  6 
B)  4 
C)  3 
D)  1/3

Question 12

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

Accepted Answer

A)  9 fewer cars sold. 
B)  1 fewer cars sold. 
C)  4 fewer cars sold. 
D)  1/3 car not sold. 
A)  9 fewer cars sold. 
B)  1 fewer cars sold. 
C)  4 fewer cars sold. 
D)  1/3 car not sold.

Question 13

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.You have arrived with 300 coconuts to trade.The minimum number of fish you would be willing to accept in exchange for those coconuts:

Accepted Answer

A)  is 1,500 fish,because that's how many you can catch without trade. 
B)  is 1,200 fish,because that is just enough to offset the opportunity cost of harvesting the coconuts. 
C)  is 301 fish,because anything better than a one-for-one trade benefits your island. 
D)  is 901 fish,because that is just a little more than the opportunity cost of harvesting the coconuts. 
A)  is 1,500 fish,because that's how many you can catch without trade. 
B)  is 1,200 fish,because that is just enough to offset the opportunity cost of harvesting the coconuts. 
C)  is 301 fish,because anything better than a one-for-one trade benefits your island. 
D)  is 901 fish,because that is just a little more than the opportunity cost of harvesting the coconuts.

Question 14

The textbook notes that the last time a major league batter hit .400 was in 1941.This is because:

Accepted Answer

A)  the average quality of batters has fallen. 
B)  the league imposes harsh penalties for steroid use. 
C)  specialization by pitchers,infielders,and outfielders has made it harder for batters to hit. 
D)  baseball diamonds have become larger. 
A)  the average quality of batters has fallen. 
B)  the league imposes harsh penalties for steroid use. 
C)  specialization by pitchers,infielders,and outfielders has made it harder for batters to hit. 
D)  baseball diamonds have become larger.

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 opportunity cost of the 2nd hour of playing the video game is:

Accepted Answer

A)  10 points on the test. 
B)  5 points on the test. 
C)  7 points on the test. 
D)  2.5 points on the test. 
A)  10 points on the test. 
B)  5 points on the test. 
C)  7 points on the test. 
D)  2.5 points on the test.

Question 16

The production possibilities curve shows:

Accepted Answer

A)  the minimum production of one good for every possible production level of the other good. 
B)  how increasing the inputs used for one good increases the production of the other good. 
C)  the maximum production of one good for every possible production level of the other good. 
D)  how increasing the production of one good allows production of the other good to also rise. 
A)  the minimum production of one good for every possible production level of the other good. 
B)  how increasing the inputs used for one good increases the production of the other good. 
C)  the maximum production of one good for every possible production level of the other good. 
D)  how increasing the production of one good allows production of the other good to also rise.

Question 17

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.According to Moe's PPF,moving from a grade of 80 in economics to a grade of 90 in economics:

Accepted Answer

A)  is inefficient. 
B)  comes at a lower opportunity cost than moving from a 90 to a 100 in economics. 
C)  is not feasible. 
D)  comes at a higher opportunity cost than moving from a 90 to a 100 in economics. 
A)  is inefficient. 
B)  comes at a lower opportunity cost than moving from a 90 to a 100 in economics. 
C)  is not feasible. 
D)  comes at a higher opportunity cost than moving from a 90 to a 100 in economics.

Question 18

Economic growth can result from a(n):

Accepted Answer

A)  increase in the amount of productive resources. 
B)  increase in number of the minimum wage jobs. 
C)  increase in the amount of consumer goods produced. 
D)  decrease in the number of workers available. 
A)  increase in the amount of productive resources. 
B)  increase in number of the minimum wage jobs. 
C)  increase in the amount of consumer goods produced. 
D)  decrease in the number of workers available.

Question 19

The key to resolving the apparent paradox of international trade increasing total output yet facing much political opposition is noting that:

Accepted Answer

A)  economists are mistaken about the increase in output. 
B)  only the wealthy benefit from trade. 
C)  no one benefits from trade. 
D)  everyone does not benefit equally from trade. 
A)  economists are mistaken about the increase in output. 
B)  only the wealthy benefit from trade. 
C)  no one benefits from trade. 
D)  everyone does not benefit equally from trade.

Question 20

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 0 computers and 220 calculators per hour.If they wish to produce 2 computers and 200 calculators per hour,then Smith will spend __________ and Jones will spend __________.

Accepted Answer

A)  30 minutes on each;30 minutes on each 
B)  48 minutes on computers and 12 minutes on calculators;1 hour on calculators 
C)  1 hour on calculators;10 minutes on computers and 50 minutes on calculators 
D)  12 minutes on computers and 48 minutes on calculators;1 hour on calculators 
A)  30 minutes on each;30 minutes on each 
B)  48 minutes on computers and 12 minutes on calculators;1 hour on calculators 
C)  1 hour on calculators;10 minutes on computers and 50 minutes on calculators 
D)  12 minutes on computers and 48 minutes on calculators;1 hour on calculators

According to the textbook,the largest factor explaining the variance in the performance of the economies of the world is the:

The Principle of Increasing Opportunity Costs implies that:

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.The opportunity cost of making an extra calculator for Smith is and for Jones it is .

Points that lie below the production possibilities curve are inefficient because:

Which of the following statements is always true?

The benefits of specialization can be used to explain why:

NAFTA helped ______ to exploit a comparative advantage in the production of goods made by unskilled labor.

Point A on a linear production possibilities curve represents a combination of 12 coffees and 3 cappuccinos,and point B represents 3 coffees and 6 cappuccinos.Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis. The opportunity cost of a cup of coffee is:

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 Larry,the opportunity cost of selling a truck is:

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:

The textbook notes that the last time a major league batter hit .400 was in 1941.This is because:

The production possibilities curve shows:

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.According to Moe's PPF,moving from a grade of 80 in economics to a grade of 90 in economics:

Economic growth can result from a(n):

The key to resolving the apparent paradox of international trade increasing total output yet facing much political opposition is noting 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

Filters

Exam 2: Comparative Advantage

According to the textbook,the largest factor explaining the variance in the performance of the economies of the world is the:

The Principle of Increasing Opportunity Costs implies that:

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.The opportunity cost of making an extra calculator for Smith is __________ and for Jones it is __________.

Points that lie below the production possibilities curve are inefficient because:

Which of the following statements is always true?

The benefits of specialization can be used to explain why:

NAFTA helped ______ to exploit a comparative advantage in the production of goods made by unskilled labor.

Point A on a linear production possibilities curve represents a combination of 12 coffees and 3 cappuccinos,and point B represents 3 coffees and 6 cappuccinos.Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis. The opportunity cost of a cup of coffee is:

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 Larry,the opportunity cost of selling a truck is:

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:

The textbook notes that the last time a major league batter hit .400 was in 1941.This is because:

The production possibilities curve shows:

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.According to Moe's PPF,moving from a grade of 80 in economics to a grade of 90 in economics:

Economic growth can result from a(n):

The key to resolving the apparent paradox of international trade increasing total output yet facing much political opposition is noting 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

Filters

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.The opportunity cost of making an extra calculator for Smith is and for Jones it is .