Question 1

If Jim can sell paper at a lower opportunity cost than Dwight can, then:

Accepted Answer

A)  Jim has an absolute advantage in paper sales. 
B)  Dwight has an absolute advantage in paper sales. 
C)  Jim has a positive advantage in paper sales. 
D)  Jim has a comparative advantage in paper sales. 
E)  Dwight has a comparative advantage in paper sales. 
A)  Jim has an absolute advantage in paper sales. 
B)  Dwight has an absolute advantage in paper sales. 
C)  Jim has a positive advantage in paper sales. 
D)  Jim has a comparative advantage in paper sales. 
E)  Dwight has a comparative advantage in paper sales.

Question 2

The process of using current resources to create or buy new capital is called:

Accepted Answer

A)  absolute advantage. 
B)  comparative advantage. 
C)  investment. 
D)  the law of increasing relative cost. 
E)  economic growth. 
A)  absolute advantage. 
B)  comparative advantage. 
C)  investment. 
D)  the law of increasing relative cost. 
E)  economic growth.

Question 3

Refer to the following figure to answer the next  questions.  
-Which of the following represents an inefficient point?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 4

The production possibilities frontier (PPF) shows:

Accepted Answer

A)  the trade-off between the efficient production of two different goods. 
B)  the difference between micro analysis and macro analysis. 
C)  the difference between normative and positive analysis. 
D)  how a firm should price a new product. 
E)  how price and quantity are related for a single good. 
A)  the trade-off between the efficient production of two different goods. 
B)  the difference between micro analysis and macro analysis. 
C)  the difference between normative and positive analysis. 
D)  how a firm should price a new product. 
E)  how price and quantity are related for a single good.

Question 5

You have a comparative advantage in producing a good whenever:

Accepted Answer

A)  you enjoy producing that good. 
B)  you can produce more of the good than someone else can using the same resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost of producing that good is lower than that of other producers. 
E)  you have specific training in the production of that good. 
A)  you enjoy producing that good. 
B)  you can produce more of the good than someone else can using the same resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost of producing that good is lower than that of other producers. 
E)  you have specific training in the production of that good.

Question 6

Refer to the following table to answer the next  questions.  
-Given the same quantity of resources, what is Jay-Z's opportunity cost of producing a New York pizza?

Accepted Answer

A)  5/2 Philly cheesesteaks 
B)  1/3 Philly cheesesteak 
C)  3 Philly cheesesteaks 
D)  120/125 New York pizza 
E)  4/5 New York pizza 
A)  5/2 Philly cheesesteaks 
B)  1/3 Philly cheesesteak 
C)  3 Philly cheesesteaks 
D)  120/125 New York pizza 
E)  4/5 New York pizza

Question 7

Consider the following scenario to answer the next questions: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.
-What is Rachel's opportunity cost of baking 1 pie?

Accepted Answer

A)  2 pies 
B)  1 pie 
C)  1 loaf of bread 
D)  1/2 loaf of bread 
E)  2 loaves of bread 
A)  2 pies 
B)  1 pie 
C)  1 loaf of bread 
D)  1/2 loaf of bread 
E)  2 loaves of bread

Question 8

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Accepted Answer

A)  a production possibilities frontier (PPF). 
B)  a supply curve. 
C)  opportunity cost. 
D)  a consumer demand curve. 
E)  absolute advantage. 
A)  a production possibilities frontier (PPF). 
B)  a supply curve. 
C)  opportunity cost. 
D)  a consumer demand curve. 
E)  absolute advantage.

Question 9

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next questions.  
-What is Michael's opportunity cost of a sculpture?

Accepted Answer

A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture 
A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture

Question 10

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions.  
-What is DiNozzo's opportunity cost of making a wooden boat?

Accepted Answer

A)  20 solved crimes 
B)  30 solved crimes 
C)  10 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat 
A)  20 solved crimes 
B)  30 solved crimes 
C)  10 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat

Question 11

Consider the following scenario. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. If Rachel and Joey decide to specialize in order to maximize their combined output, who should produce what?

Accepted Answer

A)  Joey should specialize in making pies because he has an absolute advantage. 
B)  Rachel should specialize in making pies and Joey should specialize in making bread. 
C)  Joey should specialize in making pies and Rachel should specialize in making bread. 
D)  Rachel should specialize in making bread and pies because she has a comparative advantage in both. 
E)  Rachel should not specialize because she is better at producing both. 
A)  Joey should specialize in making pies because he has an absolute advantage. 
B)  Rachel should specialize in making pies and Joey should specialize in making bread. 
C)  Joey should specialize in making pies and Rachel should specialize in making bread. 
D)  Rachel should specialize in making bread and pies because she has a comparative advantage in both. 
E)  Rachel should not specialize because she is better at producing both.

Question 12

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

Accepted Answer

Unemployed labor resources mean that, as

Question 13

Suppose that, on a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with spaces where you can calculate the opportunity cost. Who has an absolute advantage in spreading mulch?

Accepted Answer

A)  Zuckerberg has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. 
B)  Gates has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. 
C)  Zuckerberg has the advantage because he gives up more trees each time he spreads 1 cubic yard of mulch. 
D)  Neither has an absolute advantage in spreading mulch. 
E)  Both parties have an absolute advantage in planting trees. 
A)  Zuckerberg has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. 
B)  Gates has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. 
C)  Zuckerberg has the advantage because he gives up more trees each time he spreads 1 cubic yard of mulch. 
D)  Neither has an absolute advantage in spreading mulch. 
E)  Both parties have an absolute advantage in planting trees.

Question 14

Suppose that, on a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with blanks where you can calculate the opportunity cost. At what terms of trade (relative price ratio) could they specialize and trade with one another so that both have more trees planted and mulch spread than they could accomplish on their own?

Accepted Answer

A)  12 trees planted per 12 cubic yards of mulch spread 
B)  10 trees planted per 12 cubic yards of mulch spread 
C)  9 trees planted per 12 cubic yards of mulch spread 
D)  7 trees planted per 12 cubic yards of mulch spread 
E)  5 trees planted per 12 cubic yards of mulch spread 
A)  12 trees planted per 12 cubic yards of mulch spread 
B)  10 trees planted per 12 cubic yards of mulch spread 
C)  9 trees planted per 12 cubic yards of mulch spread 
D)  7 trees planted per 12 cubic yards of mulch spread 
E)  5 trees planted per 12 cubic yards of mulch spread

Question 15

Ceteris paribus means:

Accepted Answer

A)  in sets of two. 
B)  constant opportunity cost. 
C)  other things being equal. 
D)  buyer beware. 
E)  there is no reason to argue about people's tastes. 
A)  in sets of two. 
B)  constant opportunity cost. 
C)  other things being equal. 
D)  buyer beware. 
E)  there is no reason to argue about people's tastes.

Question 16

Refer to the following figure for the next questions.  
-The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Accepted Answer

A)  2 blueberry pies. 
B)  14 apple pies. 
C)  7 blueberry pies. 
D)  4 blueberry pies. 
E)  2 apple pies. 
A)  2 blueberry pies. 
B)  14 apple pies. 
C)  7 blueberry pies. 
D)  4 blueberry pies. 
E)  2 apple pies.

Question 17

The table below shows the maximum number of burgers or hot dogs that Vinny and The Situation can cook in 1 hour.
a. Fill in the rest of the table with the opportunity cost of burgers and hot dogs for each person. Be sure to include the units.
b. Identify who has a comparative advantage in producing each good.

Accepted Answer

a. @#IMG-DLM& b. The Situation has a com

Question 18

Refer to the following figure to answer the next  questions.  
-You can see that the opportunity cost of moving from point B to point D is different from the opportunity cost of moving from point D to point C because:

Accepted Answer

A)  apples are bigger than blueberries. 
B)  the slope of the production possibilities frontier (PPF) is different in each of the two segments. 
C)  they are all efficient points. 
D)  they are all attainable points. 
E)  the opportunity cost is constant along the PPF. 
A)  apples are bigger than blueberries. 
B)  the slope of the production possibilities frontier (PPF) is different in each of the two segments. 
C)  they are all efficient points. 
D)  they are all attainable points. 
E)  the opportunity cost is constant along the PPF.

Question 19

Economic growth is represented on a production possibilities frontier (PPF) by the PPF:

Accepted Answer

A)  getting steeper. 
B)  getting flatter. 
C)  shifting inward. 
D)  shifting outward. 
E)  rotating downward. 
A)  getting steeper. 
B)  getting flatter. 
C)  shifting inward. 
D)  shifting outward. 
E)  rotating downward.

Question 20

Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

Accepted Answer

A)  1 salad per 1 steak 
B)  2 salads per 1 steak 
C)  2.5 salads per 1 steak 
D)  3 salads per 1 steak 
E)  3.5 salads per 1 steak 
A)  1 salad per 1 steak 
B)  2 salads per 1 steak 
C)  2.5 salads per 1 steak 
D)  3 salads per 1 steak 
E)  3.5 salads per 1 steak

If Jim can sell paper at a lower opportunity cost than Dwight can, then:

The process of using current resources to create or buy new capital is called:

Refer to the following figure to answer the next questions. -Which of the following represents an inefficient point?

The production possibilities frontier (PPF) shows:

You have a comparative advantage in producing a good whenever:

Refer to the following table to answer the next questions. -Given the same quantity of resources, what is Jay-Z's opportunity cost of producing a New York pizza?

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next questions. -What is Michael's opportunity cost of a sculpture?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is DiNozzo's opportunity cost of making a wooden boat?

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

Ceteris paribus means:

Refer to the following figure for the next questions. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Refer to the following figure to answer the next questions. -You can see that the opportunity cost of moving from point B to point D is different from the opportunity cost of moving from point D to point C because:

Economic growth is represented on a production possibilities frontier (PPF) by the PPF:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Exam 2: Model Building and Gains From Trade

If Jim can sell paper at a lower opportunity cost than Dwight can, then:

The process of using current resources to create or buy new capital is called:

Refer to the following figure to answer the next questions. -Which of the following represents an inefficient point?

The production possibilities frontier (PPF) shows:

You have a comparative advantage in producing a good whenever:

Refer to the following table to answer the next questions. -Given the same quantity of resources, what is Jay-Z's opportunity cost of producing a New York pizza?

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next questions. -What is Michael's opportunity cost of a sculpture?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is DiNozzo's opportunity cost of making a wooden boat?

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

Ceteris paribus means:

Refer to the following figure for the next questions. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Refer to the following figure to answer the next questions. -You can see that the opportunity cost of moving from point B to point D is different from the opportunity cost of moving from point D to point C because:

Economic growth is represented on a production possibilities frontier (PPF) by the PPF:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters