Deck 2: Specializationand Exchange

Question 1

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?

A) 400 bushels of apples, 20 watermelons
B) 100 bushels of apples, 15 watermelons
C) 300 bushels of apples, 10 watermelons
D) 400 bushels of apples, 10 watermelons

Answer 1

100 bushels of apples, 15 watermelons

Question 2

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon is:

A) 10 bushels of apples.
B) 20 bushels of apples.
C) 30 bushels of apples.
D) 40 bushels of apples.

Answer 2

20 bushels of apples.

Question 3

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve could choose to produce:

A) I, II, or IV.
B) I, II, or III.
C) I, IV, or III.
D) II, III, or IV.

Answer 3

I, IV, or III.

Question 4

A production possibilities frontier is a line or curve that:

A) shows all the possible combinations of outputs that can be produced using all available resources.
B) shows what should be produced when all available resources are efficiently used.
C) shows the best combinations of outputs that can be produced using all available resources.
D) explains why societies make the choices they do.

Question 5

Consider the production possibilities frontier displayed in the figure shown. Which points are efficient and attainable with existing resources?

A) Only point II
B) Only point I
C) Points I and IV
D) Points I, III, and IV

Question 6

The invisible hand refers to the coordination that occurs from:

A) everyone working in his or her own self-interest.
B) a government agency finding efficiencies.
C) everyone working for the overall good of society.
D) a government coordinating economic activity.

Question 7

When an economist says that a country can experience gains from trade, this means it can:

A) consume at a point outside its production possibilities frontier.
B) increase its exports.
C) increase the efficiency of its production.
D) experience a bowed-out production possibilities frontier.

Question 8

Consider the production possibilities frontier displayed in the figure shown. A society with this frontier should choose to produce:

A) at point C, because it is the safest.
B) at point B, because this is the most the society can produce.
C) at any point that produces some of each good.
D) at any point on the frontier rather than inside it.

Question 9

The slope of a production possibilities frontier measures:

A) the opportunity cost of producing one good in terms of the other.
B) the trade-off in the consumption of one good versus the other.
C) how much of the resources must be used in order to produce one the goods.
D) the inefficient production of a good.

Question 10

Consider the production possibilities frontier displayed in the figure shown. If a society with this frontier chooses to produce 200 bushels of apples, it can produce no more than:

A) 20 watermelons.
B) 15 watermelons.
C) 10 watermelons.
D) 5 watermelons.

Question 11

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of a bushel of apples is:

A) 3/20 watermelons.
B) 1/20 watermelons.
C) 1/40 watermelons.
D) 1/30 watermelons.

Question 12

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve currently:

A) cannot obtain point II.
B) can only obtain point III.
C) can only obtain point IV or point I.
D) cannot obtain point III.

Question 13

The concept of the invisible hand was first introduced to economics by:

A) David Ricardo.
B) Adam Smith.
C) Thomas Malthus.
D) Milton Friedman.

Question 14

Consider the production possibilities frontier displayed in the figure shown. The fact that the line slopes downward displays which economic concept?

A) Production possibilities
B) Trade-offs
C) Specialization
D) Efficiency

Question 15

If we consider the reality that each worker has different skills, then the production possibilities frontier should:

A) be bowed inward.
B) be bowed outward.
C) be a straight line.
D) shift outward.

Question 16

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon:

A) will decrease as more watermelons are produced.
B) is constant.
C) will increase as more watermelons are produced.
D) is zero at point C.

Question 17

Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

A) IV
B) III
C) II
D) I

Question 18

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

A) 400 bushels of apples, 20 watermelons
B) 100 bushels of apples, 15 watermelons
C) 150 bushels of apples, 10 watermelons
D) 400 bushels of apples, 0 watermelons

Question 19

Consider the production possibilities frontier displayed in the figure shown. If this society chooses to produce 15 watermelons, it can produce no more than:

A) 400 bushels of apples.
B) 300 bushels of apples.
C) 200 bushels of apples.
D) 100 bushels of apples.

Question 20

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

A) Producing at point I is the best choice because both books and pizzas are made.
B) Producing at point IV would be inefficient because no books would be produced.
C) Producing at point III is the best choice because it's closest to the middle of the line.
D) Producing at point II is impossible.

Question 21

Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

A) decreases.
B) stays the same.
C) increases.
D) decreases then increases.

Question 22

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increased to 600. Which of the following statements is now true?

A) Country B's production possibilities frontier has rotated outward for only the production of iPhones.
B) Country B's production possibilities frontier has shifted straight outward.
C) Country B's production possibilities frontier has shifted straight inward.
D) Country B's production possibilities are now more limited due to overcrowding from the extra workers.

Question 23

When nations trade, the result would most likely be a(n):

A) increase in total production, which would benefit every nation involved.
B) increase in total production, which would benefit only the wealthiest nations.
C) decrease in total production, which would benefit only the wealthiest nations.
D) decrease in total production, which would benefit countries that do not have an absolute advantage.

Question 24

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF ₁ to PPF ₃?

A) More workers
B) Better printing press technology
C) A desire to read more books
D) Better sewing technology

Question 25

Consider the production possibilities frontier in the figure shown. The opportunity cost of cars between points B and C is:

A) greater than the opportunity cost of cars between points A and B.
B) less than the opportunity cost of cars between points A and B.
C) greater than the opportunity cost of cars between any other two points.
D) There is no opportunity cost between points B and C.

Question 26

When nations trade:

A) only the strongest nation benefits.
B) only the weakest nation benefits.
C) all nations involved can benefit.
D) only one nation benefits, but we cannot identify which without more information.

Question 27

Choosing to produce at any point within (inside, not on) a production possibilities frontier is:

A) inefficient, meaning the society would not be using all its available resources in their best possible uses.
B) efficient, meaning the society would be using all its available resources in their best possible uses.
C) unobtainable, meaning the society cannot produce that combination of goods.
D) efficient, but not attainable.

Question 28

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₃ to PPF₁?

A) A tornado
B) More workers
C) A desire to read less books
D) Better sewing technology

Question 29

Hurricane Katrina destroyed much of New Orleans and other parts of the South. Which of the following statements is true? The hurricane:

A) caused the U.S. production possibilities frontier to shift inward.
B) caused production possibilities to increase, since much work was needed to rebuild the city.
C) caused the U.S. production possibilities frontier to bow inward.
D) moved production from a point on the frontier to a point inside the frontier.

Question 30

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. A bundle of goods that Country A could potentially make would be:

A) (1,000 iPhones, 500 iPads).
B) (500 iPhones, 500 iPads).
C) (500 iPhones, 250 iPads).
D) (750 iPhones, 150 iPads).

Question 31

Consider the production possibilities frontier in the figure shown. The opportunity cost of one cigar between points A and B is:

A) 1/5 car.
B) 20 cars.
C) 5 cars.
D) 10 cars.

Question 32

The production possibilities frontier:

A) shows all possible combinations of goods but does not tell us which combination a society should choose.
B) shows the best combination of goods that a society should choose.
C) cannot show all possible combinations of goods because society is typically inefficient.
D) shows us the possible combinations of goods a society should choose, but cannot tell us which points will be inefficient.

Question 33

An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

A) shift inward.
B) shift outward.
C) remain the same.
D) shift inward, then shift outward.

Question 34

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₁ to PPF₂?

A) More workers
B) Better printing press technology
C) A desire to read more books
D) Better sewing technology

Question 35

If the United States, a wealthy nation, trades with Cambodia, a poorer, less developed nation, which of the following statements is likely true?

A) The United States is taking advantage of Cambodia and is the only beneficiary to the trade.
B) Cambodia has been pressured to enter trade and is not benefiting at all.
C) Both the United States and Cambodia can benefit from trading.
D) The United States is being charitable and not benefiting from the trade at all.

Question 36

A realistic production possibilities curve is _____, while a simple production possibilities curve _____.

A) bowed outward; has constant opportunity costs.
B) straight; has constant opportunity costs.
C) straight; bows outward.
D) bowed outward has increasing opportunity costs.

Question 37

If society were to experience an increase in its available resources, its production possibilities frontier would:

A) shift outward.
B) shift inward.
C) not move.
D) become convex.

Question 38

If we consider the reality that each worker has different skills, then the production possibilities frontier:

A) should display a constant opportunity cost of a good, as more of that good is produced.
B) should display a decreasing opportunity cost of a good, as more of that good is produced.
C) should display an increasing opportunity cost of a good as more of that good is produced.
D) cannot be drawn, as too many variables would need to be taken into consideration.

Question 39

Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

A) decreases.
B) stays the same.
C) increases.
D) decreases then increases.

Question 40

Which of the following statements about trade is true?

A) Trade involves a winner and a loser.
B) Trade often hurts both parties in the long run.
C) Trade is a zero-sum proposition.
D) Trade can benefit both parties.

Question 41

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

A) (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars)
B) (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars)
C) (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars)
D) (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars)

Question 42

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. If Country A were to divide its resources equally, it could produce:

A) 30 cars and 6 trucks.
B) 25 cars and 5 trucks.
C) 15 cars and 3 trucks.
D) 10 cars and 4 trucks.

Question 43

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A would be using resources efficiently if it was producing:

A) (500 iPhones, 100 iPads).
B) (500 iPhones, 150 iPads).
C) (500 iPhones, 200 iPads).
D) (500 iPhones, 250 iPads).

Question 44

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. A bundle of goods that Country A could potentially make would be:

A) (500 iPhones, 500 iPads).
B) (500 iPhones, 400 iPads).
C) (500 iPhones, 300 iPads).
D) (500 iPhones, 200 iPads).

Question 45

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Tom divides his time evenly between activities and acts efficiently, he will produce:

A) 16 chairs and 4 tables.
B) 12 chairs and 3 tables.
C) 8 chairs and 2 tables.
D) 4 chairs and 3 tables.

Question 46

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?

A) (400 iPhones, 2,000 iPads)
B) (200 iPhones, 1,500 iPads)
C) (300 iPhones, 450 iPads)
D) (400 iPhones, 1 iPad)

Question 47

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?

A) (400 iPhones, 2,000 iPads)
B) (300 iPhones, 500 iPads)
C) (200 iPhones, 1,500 iPads)
D) (100 iPhones, 2,000 iPads)

Question 48

When a country is producing goods and services efficiently it:

A) is producing at a point on or below its production possibilities frontier.
B) is getting the most output by using all its available resources.
C) is trading with other countries.
D) is able to reach a point beyond its production possibilities frontier.

Question 49

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. In one day, Jerry can produce:

A) 14 chairs and 7 tables.
B) 12 chairs and 6 tables.
C) 10 chairs and 5 tables.
D) 6 chairs and 4 tables.

Question 50

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country A could not make?

A) (250 iPhones, 250 iPads)
B) (400 iPhones, 250 iPads)
C) (500 iPhones, 250 iPads)
D) (500 iPhones, 300 iPads)

Question 51

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier:

A) measures the opportunity cost of trucks in terms of cars.
B) measures the trade-off that Country A faces when deciding how to allocate resources.
C) is constant, because the opportunity cost remains constant.
D) All of these statements are true.

Question 52

Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

A) (15 airplanes, 15 trucks)
B) (20 airplanes, 40 trucks)
C) (10 airplanes, 30 trucks)
D) (5 airplanes, 30 trucks)

Question 53

Refer to the figure shown, which represents the production possibilities frontiers (PPFs) for Countries A and B. The slope of Country A's PPF is _____ and the slope of Country B's PPF is _____.

A) −5; −3
B) −30; −3
C) −1/5; −1/3
D) 1/5; 1/3

Question 54

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. At the end of the day, if Jerry was efficient with his resources, he will have produced:

A) 12 chairs and 0 tables.
B) 10 chairs and 2 tables.
C) 8 chairs and 2 tables.
D) 6 chairs and 2 tables.

Question 55

When a producer is operating efficiently, it is producing:

A) at a point on its production possibilities frontier.
B) at a point on or below its production possibilities frontier.
C) only one good.
D) the good in which it has an absolute advantage.

Question 56

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country B could produce?

A) (7,200 bananas, 2,400 tomatoes) and (3,600 bananas, 1,200 tomatoes)
B) (7,200 bananas, 0 tomatoes) and (4,000 bananas, 1,200 tomatoes)
C) (3,600 bananas, 1,200 tomatoes) and (1,800 bananas, 1,600 tomatoes)
D) (1,800 bananas, 1,800 tomatoes) and (900 bananas, 2,200 tomatoes)

Question 57

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. In one day, Tom can produce either:

A) (16 chairs, 4 tables) or (8 chairs, 2 tables).
B) (8 chairs, 2 tables) or (4 chairs, 6 tables).
C) (8 chairs, 2 tables) or (4 chairs, 3 tables).
D) (12 chairs, 3 tables) or (8 chairs, 3 tables).

Question 58

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B would be using resources efficiently if it was producing:

A) (200 iPhones, 1,750 iPads).
B) (200 iPhones, 1,500 iPads).
C) (200 iPhones, 1,000 iPads).
D) (200 iPhones, 750 iPads).

Question 59

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country A could produce?

A) (5,000 bananas, 1,000 tomatoes) and (1,000 bananas, 5,000 tomatoes)
B) (5,000 bananas, 0 tomatoes) and (2,500 bananas, 500 tomatoes)
C) (2,500 bananas, 500 tomatoes) and (1,250 bananas, 800 tomatoes)
D) (2,500 bananas, 750 tomatoes) and (1,250 bananas, 750 tomatoes)

Question 60

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could not make?

A) (400 iPhones, 250 iPads)
B) (300 iPhones, 500 iPads)
C) (200 iPhones, 750 iPads)
D) (100 iPhones, 1,000 iPads)

Question 61

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country A is:

A) 30 cars.
B) 6 trucks.
C) 5 cars.
D) 3 cars.

Question 62

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:

A) 12 cars.
B) 4 trucks.
C) 1.5 cars
D) 3 cars.

Question 63

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf between points C and D is:

A) 1 sweater.
B) 20 sweaters.
C) 10 sweaters
D) 2 sweaters.

Question 64

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. For Tom, the opportunity cost of building a table is _______ chairs made.

A) 16
B) 12
C) 8
D) 4

Question 65

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is true?Point A is unattainable.Point B is inefficient.Points A and D are inefficient.Points C and D are attainable.

A) I and II only
B) III only
C) II and IV only
D) IV only

Question 66

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

A) Country A has a comparative advantage at producing cars and Country B has a comparative advantage at producing trucks.
B) Country A has a comparative advantage at producing trucks and Country B has a comparative advantage at producing cars.
C) Country A has a comparative advantage at producing both cars and trucks.
D) Country B has a comparative advantage at producing both cars and trucks.

Question 67

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country A, the trade-off of making one tomato is:

A) 2 bananas.
B) 3 bananas.
C) 4 bananas.
D) 5 bananas.

Question 68

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a comparative advantage at producing:

A) iPhones.
B) iPads.
C) both iPhones and iPads.
D) neither iPhones nor iPads.

Question 69

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf is largest between:

A) points A and B.
B) points B and C.
C) points C and D.
D) points A and D.

Question 70

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one bushel of wheat is:

A) 30 computers.
B) 5 computers.
C) 6 computers.
D) 1/5 computers.

Question 71

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country B, the trade-off to producing one tomato is:

A) 2 bananas.
B) 3 bananas.
C) 4 bananas.
D) 5 bananas.

Question 72

If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:

A) Iowa should specialize in corn production.
B) Iowa has a comparative advantage at producing corn.
C) Iowa should export corn to Ohio.
D) Ohio has a comparative advantage at producing corn.

Question 73

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is true?

A) In Country A, the opportunity cost of one iPhone is two iPads.
B) In Country A, the opportunity cost of one iPad is two iPhones.
C) The opportunity cost of iPads is lower in Country A than in Country B.
D) In Country B, the opportunity cost of one iPhone is two iPads.

Question 74

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Assuming both countries have the same amount of resources available to them, which of the following statements is true?

A) Country A has an absolute advantage at producing cars, and Country B has an absolute advantage at producing trucks.
B) Country A has an absolute advantage at producing trucks and Country B has an absolute advantage at producing cars.
C) Country A has an absolute advantage at producing both cars and trucks.
D) Country B has an absolute advantage at producing both cars and trucks.

Question 75

Suppose that a worker in Country A can make either 15 cars or 5 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 4 cars or 20 computers each year. Country B has 600 workers. A bundle of goods that Country B could potentially make would be:

A) (2,400 cars, 12,000 computers).
B) (2,400 cars, 4,000 computers).
C) (1,400 cars, 6,000 computers).
D) (1,200 cars, 6,000 computers).

Question 76

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

A) Country A has a comparative advantage at producing cars.
B) Country A has a comparative advantage at producing trucks.
C) Country A has a comparative advantage at producing both cars and trucks.
D) Country B has a comparative advantage at producing both cars and trucks.

Question 77

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A has an absolute advantage at producing:

A) iPhones.
B) iPads.
C) both iPhones and iPads.
D) neither iPhones nor iPads.

Question 78

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one avocado is:

A) 2/3 bananas.
B) 2 bananas.
C) 1.5 bananas.
D) 210 bananas.

Question 79

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Why are these graphs not realistic representations of actual countries?

A) The production possibilities frontiers are straight lines rather than bowed out.
B) They only represent the production of two goods.
C) They only represent two countries.
D) All of these statements are reasons why these graphs are not realistic representations.

Question 80

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. For Jerry, the opportunity cost of building a table is _____ chairs made.

A) 14
B) 7
C) 4
D) 2