Question 1

The production possibilities frontier illustrates

Accepted Answer

A) the combinations of output that an economy should produce. 
B) the combinations of output that an economy should consume. 
C) the combinations of output that an economy can produce. 
D) All of the above are correct. 
A) the combinations of output that an economy should produce. 
B) the combinations of output that an economy should consume. 
C) the combinations of output that an economy can produce. 
D) All of the above are correct. C

Question 2

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier    
-Refer to Figure 3-9.If the production possibilities frontiers shown are each for two days of production,then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together not make in a given 2-day production period?

Accepted Answer

A) 9 bolts and 122 nails 
B) 21 bolts and 98 nails 
C) 36 bolts and 56 nails 
D) 47 bolts and 18 nails 
A) 9 bolts and 122 nails 
B) 21 bolts and 98 nails 
C) 36 bolts and 56 nails 
D) 47 bolts and 18 nails D

Question 3

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier    
-Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Accepted Answer

A) 12 pounds of coffee and 12 pounds of soybeans. 
B) 14 pounds of coffee and 9 pounds of soybeans. 
C) 16 pounds of coffee and 6 pounds of soybeans. 
D) 28 pounds of coffee and 18 pounds of soybeans. 
A) 12 pounds of coffee and 12 pounds of soybeans. 
B) 14 pounds of coffee and 9 pounds of soybeans. 
C) 16 pounds of coffee and 6 pounds of soybeans. 
D) 28 pounds of coffee and 18 pounds of soybeans. B

Question 4

Figure 3-1
Panel (a)
Panel (b)    
-Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches is constant in

Accepted Answer

A) Panel (a). 
B) Panel (b). 
C) both Panel (a)and Panel (b). 
D) neither Panel (a)nor Panel (b). 
A) Panel (a). 
B) Panel (b). 
C) both Panel (a)and Panel (b). 
D) neither Panel (a)nor Panel (b).

Question 5

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier    
-Refer to Figure 3-7.If Bintu and Juba both spend all of their time making bowls,then total production is

Accepted Answer

A) 2 bowls. 
B) 3 bowls. 
C) 4 bowls. 
D) 6 bowls. 
A) 2 bowls. 
B) 3 bowls. 
C) 4 bowls. 
D) 6 bowls.

Question 6

Figure 3-2
Brazil's Production Possibilities Frontier  
-Refer to Figure 3-2.If the production possibilities frontier shown is for two months of production,then which of the following combinations of peanuts and cashews could Brazil produce in two months?

Accepted Answer

A) 7 peanuts and 35 cashews 
B) 5 peanuts and 100 cashews 
C) 2 peanuts and 190 cashews 
D) 3 peanuts and 150 cashews 
A) 7 peanuts and 35 cashews 
B) 5 peanuts and 100 cashews 
C) 2 peanuts and 190 cashews 
D) 3 peanuts and 150 cashews

Question 7

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier    
-Refer to Figure 3-7.If Bintu must work 2 hours to make each cup,then her production possibilities frontier is based on how many hours of work?

Accepted Answer

A) 2 hours 
B) 4 hours 
C) 8 hours 
D) 16 hours 
A) 2 hours 
B) 4 hours 
C) 8 hours 
D) 16 hours

Question 8

Figure 3-2
Brazil's Production Possibilities Frontier  
-Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one peanut?

Accepted Answer

A) 1/10 hour 
B) 1/3 hour 
C) 3 hours 
D) 10 hours 
A) 1/10 hour 
B) 1/3 hour 
C) 3 hours 
D) 10 hours

Question 9

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier    
-Refer to Figure 3-7.If Bintu and Juba each divides her time equally between making bowls and making cups,then total production is

Accepted Answer

A) 2 bowls and 6 cups. 
B) 3 bowls and 7 cups. 
C) 4 bowls and 8 cups. 
D) 6 bowls and 14 cups. 
A) 2 bowls and 6 cups. 
B) 3 bowls and 7 cups. 
C) 4 bowls and 8 cups. 
D) 6 bowls and 14 cups.

Question 10

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier    
-Refer to Figure 3-4.If the production possibilities frontiers shown are each for one year of production,then which of the following combinations of sweaters and jackets could Lisa and Bryce together not produce in a given year?

Accepted Answer

A) 1 sweater and 21 jackets 
B) 2 sweaters and 20 jackets 
C) 3 sweaters and 12 jackets 
D) 5 sweaters and 4 jackets 
A) 1 sweater and 21 jackets 
B) 2 sweaters and 20 jackets 
C) 3 sweaters and 12 jackets 
D) 5 sweaters and 4 jackets

Question 11

Olivia bakes cakes and Andrew grows corn.Olivia and Andrew both like to eat cake and eat corn.In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade?

Accepted Answer

A) Olivia cannot grow corn and Andrew cannot bake cakes. 
B) Olivia is better than Andrew at baking cakes and Andrew is better than Olivia at growing corn. 
C) Olivia is better than Andrew at baking cakes and at growing corn. 
D) Both Olivia and Andrew can benefit from trade in all of the above cases. 
A) Olivia cannot grow corn and Andrew cannot bake cakes. 
B) Olivia is better than Andrew at baking cakes and Andrew is better than Olivia at growing corn. 
C) Olivia is better than Andrew at baking cakes and at growing corn. 
D) Both Olivia and Andrew can benefit from trade in all of the above cases.

Question 12

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier    
-Refer to Figure 3-8.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of pounds of coffee and pounds of soybeans could Chile and Colombia together not make in a given day?

Accepted Answer

A) 4 pounds of coffee and 17 pounds of soybeans 
B) 8 pounds of coffee and 14 pounds of soybeans 
C) 16 pounds of coffee and 9 pounds of soybeans 
D) 24 pounds of coffee and 3 pounds of soybeans 
A) 4 pounds of coffee and 17 pounds of soybeans 
B) 8 pounds of coffee and 14 pounds of soybeans 
C) 16 pounds of coffee and 9 pounds of soybeans 
D) 24 pounds of coffee and 3 pounds of soybeans

Question 13

Figure 3-2
Brazil's Production Possibilities Frontier  
-Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

Accepted Answer

A) for Brazil,it is more costly to produce peanuts than it is to produce cashews. 
B) Brazil will produce more peanuts and fewer cashews as time goes by. 
C) Brazil faces a tradeoff between producing peanuts and producing cashews. 
D) Brazil should specialize in producing cashews. 
A) for Brazil,it is more costly to produce peanuts than it is to produce cashews. 
B) Brazil will produce more peanuts and fewer cashews as time goes by. 
C) Brazil faces a tradeoff between producing peanuts and producing cashews. 
D) Brazil should specialize in producing cashews.

Question 14

When can two countries gain from trading two goods?

Accepted Answer

A) when the first country can only produce the first good and the second country can only produce the second good 
B) when the first country can produce both goods,but can only produce the second good at great cost,and the second country can produce both goods,but can only produce the first good at great cost 
C) when the first country is better at producing both goods and the second country is worse at producing both goods 
D) Two countries could gain from trading two goods under all of the above conditions. 
A) when the first country can only produce the first good and the second country can only produce the second good 
B) when the first country can produce both goods,but can only produce the second good at great cost,and the second country can produce both goods,but can only produce the first good at great cost 
C) when the first country is better at producing both goods and the second country is worse at producing both goods 
D) Two countries could gain from trading two goods under all of the above conditions.

Question 15

Figure 3-5
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier    
-Refer to Figure 3-5.If Hosne and Merve both spend all of their time making wallets,then total production is

Accepted Answer

A) 7 wallets. 
B) 8 wallets. 
C) 14 wallets. 
D) 28 wallets. 
A) 7 wallets. 
B) 8 wallets. 
C) 14 wallets. 
D) 28 wallets.

Question 16

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier    
-Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is

Accepted Answer

A) 15 bolts and 40 nails. 
B) 25 bolts and 70 nails. 
C) 30 bolts and 80 nails. 
D) 50 bolts and 140 nails. 
A) 15 bolts and 40 nails. 
B) 25 bolts and 70 nails. 
C) 30 bolts and 80 nails. 
D) 50 bolts and 140 nails.

Question 17

Figure 3-2
Brazil's Production Possibilities Frontier  
-Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one cashew?

Accepted Answer

A) 1/10 hour 
B) 1/3 hour 
C) 3 hours 
D) 10 hours 
A) 1/10 hour 
B) 1/3 hour 
C) 3 hours 
D) 10 hours

Question 18

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier    
-Refer to Figure 3-10.If Alice produces only lemonade,she can produce

Accepted Answer

A) 200 pitchers per day. 
B) 300 pitchers per day. 
C) 400 pitchers per day. 
D) 450 pitchers per day. 
A) 200 pitchers per day. 
B) 300 pitchers per day. 
C) 400 pitchers per day. 
D) 450 pitchers per day.

Question 19

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier    
-Refer to Figure 3-8.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

Accepted Answer

A) 4 pounds of coffee and 16 pounds of soybeans 
B) 8 pounds of coffee and 15 pounds of soybeans 
C) 16 pounds of coffee and 10 pounds of soybeans 
D) 24 pounds of coffee and 4 pounds of soybeans 
A) 4 pounds of coffee and 16 pounds of soybeans 
B) 8 pounds of coffee and 15 pounds of soybeans 
C) 16 pounds of coffee and 10 pounds of soybeans 
D) 24 pounds of coffee and 4 pounds of soybeans

Question 20

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier    
-Refer to Figure 3-10.Both Alice and Betty

Accepted Answer

A) face a constant trade-off between producing pitchers of lemonade and pizzas. 
B) can produce more pizzas than pitchers of lemonade if they devote all of their time to pizza production. 
C) would benefit from specializing in lemonade production. 
D) would benefit from specializing in pizza production. 
A) face a constant trade-off between producing pitchers of lemonade and pizzas. 
B) can produce more pizzas than pitchers of lemonade if they devote all of their time to pizza production. 
C) would benefit from specializing in lemonade production. 
D) would benefit from specializing in pizza production.

Exam 3: Interdependence and the Gains From Trade: A Parable for the Modern Economy

The production possibilities frontier illustrates

Figure 3-8 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Figure 3-1 Panel (a) Panel (b) -Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches is constant in

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba both spend all of their time making bowls,then total production is

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for two months of production,then which of the following combinations of peanuts and cashews could Brazil produce in two months?

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu must work 2 hours to make each cup,then her production possibilities frontier is based on how many hours of work?

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one peanut?

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba each divides her time equally between making bowls and making cups,then total production is

Olivia bakes cakes and Andrew grows corn.Olivia and Andrew both like to eat cake and eat corn.In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade?

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

When can two countries gain from trading two goods?

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5.If Hosne and Merve both spend all of their time making wallets,then total production is

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one cashew?

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-10.If Alice produces only lemonade,she can produce

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-10.Both Alice and Betty

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Measuring a Nations Income: The Economy's Income and Expenditure

Measuring a Nations Income: The Measurement of GDP