Deck 2: Economic Tools and Economic Systems.

Question 1

You can either read a book, get something to eat, or take a nap. The opportunity cost of getting something to eat is _____

A) the cost of what you eat.
B) the difference between the costs of the book and the food.
C) the difference between the opportunity costs of reading and sleeping.
D) the net benefit of sleeping.
E) impossible to determine because the most preferred alternative is not known.

Answer 1

impossible to determine because the most preferred alternative is not known.

Question 2

_____ is the value of the best alternative forgone when an item or activity is chosen.

A) The choice cost
B) The opportunity cost
C) The direct cost
D) The implicit cost
E) The explicit cost

Answer 2

The opportunity cost

Question 3

Opportunity cost can also be thought of as _____

A) an opportunity lost.
B) an opportunity gained.
C) a dollar expenditure.
D) the overhead spent.
E) a waste of time.

Answer 3

an opportunity lost.

Question 4

Outside of economics, the total cost of an item is measured as _____

A) the dollar cost of the item.
B) the time spent obtaining the item.
C) what you gave up to get the item.
D) the opportunity cost of the item.
E) the sunk cost of the item.

Question 5

The opportunity cost of an activity _____

A) depends on an individual's values and opinions.
B) is the same for everyone.
C) cannot be calculated.
D) is irrelevant to decision making.
E) is not related to time.

Question 6

Attending summer school costs $2,200. If you worked, you could earn $7,000. What is the opportunity cost of attending summer school?

A) $2,200.
B) $7,000.
C) $8,000.
D) $9,200.
E) $10,200.

Question 7

Opportunity costs exist because _____

A) technology is fixed.
B) of comparative advantage.
C) resources are scarce but wants are unlimited.
D) the value of lost opportunities varies.
E) of costs.

Question 8

If you enjoy playing golf, the opportunity cost of cleaning your room _____

A) is greater on sunny days than it is on rainy days.
B) is the same on sunny days as it is on rainy days.
C) is smaller on sunny days than it is on rainy days.
D) does not change with weather conditions.
E) is equal to the opportunity cost of any other chore you have to do that day.

Question 9

In economics, the total cost of an item is measured as _____

A) the dollar cost of the item.
B) the time spent obtaining the item.
C) what you gave up to get the item.
D) the implicit cost of the item.
E) the explicit cost of the item.

Question 10

What is the opportunity cost of an item?

A) the dollar cost of what is purchased.
B) the value of all alternatives not chosen.
C) the value of the best alternative not chosen.
D) less than the dollar cost of what is purchased.
E) more than the dollar cost of what is purchased.

Question 11

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true of your opportunity cost?

A) The opportunity cost of going to the movie is zero.
B) The opportunity cost of going to the party is the difference between the costs of the movie and the party.
C) The opportunity cost of going to the party is the total amount spent on transport to go to the party.
D) The opportunity cost of going to the party is the cost of the movie ticket.
E) From the above information, it's not possible to determine the opportunity cost of attending the party.

Question 12

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Movie } & \$ 0 & 10 & 20 & 30 & 40 \\\hline \text { Restaurant } & \$ 40 & 30 & 20 & 10 & 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. If you decide to spend all your money at the movies, how much can you spend at the restaurant?

A) $40
B) $30
C) $20
D) $10
E) $0

Question 13

What is the term for giving up one choice for another opportunity?

A) choice cost
B) opportunity cost
C) direct cost
D) implicit cost
E) explicit cost

Question 14

The opportunity cost of choosing a particular activity _____

A) can be easily and accurately calculated.
B) cannot be estimated.
C) does not change over time.
D) varies depending on time and circumstances.
E) is measured in terms of the money spent on the activity.

Question 15

The opportunity cost of an activity is best measured _____

A) in terms of the monetary costs of the activity.
B) by the number of alternative activities that are forgone by choosing this activity.
C) by the difference between the costs of the chosen activity and the next best alternative.
D) by the value expected from the best alternative that is forgone.
E) by the time wasted choosing among various activities.

Question 16

What is the total cost of attending school?

A) the cost of tuition, books, etc.
B) the value of the best opportunity forgone
C) the lost income if the student had been working
D) none if someone else is paying all the expenses
E) none if the student will earn more after graduating

Question 17

Melissa is a self-employed lawyer who chooses a higher-priced restaurant that is 2 miles away from her home over a cheaper restaurant that is 15 miles away from her home. Which of the following is the most likely explanation for her behavior?

A) The opportunity cost of her time is very low.
B) She does not take the time taken to travel to the restaurants into consideration.
C) She does not like to cook.
D) The prices at the more expensive restaurant understate the opportunity cost of eating there.
E) The higher cost of the more expensive restaurant is offset by the higher opportunity cost of the cheaper restaurant.

Question 18

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Movie } & \$ 0 & 10 & 20 & 30 & 40 \\\hline \text { Restaurant } & \$ 40 & 30 & 20 & 10 & 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. If you decide to spend all your money at the restaurant, how much can you spend at the movies?

A) $40
B) $30
C) $20
D) $10
E) $0

Question 19

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Movie } & \$ 0 & \$ 10 & \$ 20 & \$ 30 & \$ 40 \\\hline \text { Restaurant } & \$ 40 & \$ 30 & \$ 20 & \$ 10 & \$ 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of spending all your money at the movies?

A) $0
B) $10
C) $202
D) $30
E) $40

Question 20

The term opportunity cost suggests that _____

A) one person must lose when someone else gains in an exchange situation.
B) not all individuals make the most of life's opportunities.
C) executives do not always recognize opportunities for profit as quickly as they should.
D) the only factor that is important in decision making is cost.
E) a good must be given up to get some other good in return as resources are scarce.

Question 21

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Movie } & \$ 0 & 10 & 20 & 30 & 40 \\\hline \text { Restaurant } & \$ 40 & 30 & 20 & 10 & 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option B?

A) $10 in terms of movies
B) $30 in terms of restaurant
C) $30 in terms of movies and $10 in terms of restaurant
D) $40 because you managed to do both
E) $0 because you managed to do both

Question 22

Table 2.2
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\\hline\end{array}$$

-Refer to Table 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost if you decided to save the money and spend $0?

A) $100
B) $0 in terms of E
C) $25 in terms in terms of B
D) The total value of all the options
E) The value of the option given up if E were not chosen

Question 23

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Movie } & \$ 0 & \$ 10 & \$ 20 & \$ 30 & \$ 40 \\\hline \text { Restaurant } & \$ 40 & \$ 30 & \$ 20 & \$ 10 & \$ 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of spending all your money at the restaurant?

A) $0
B) $10
C) $20
D) $30
E) $40

Question 24

Table 2.2
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\\hline\end{array}$$

-Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of option C?

A) $100
B) $25 in terms of C
C) $25 in terms in terms of B
D) The total value of all the options taken together
E) The value of the option given up if C were not chosen

Question 25

The law of comparative advantage says that a person should produce a good if he or she _____

A) has the greatest desire to consume the good.
B) has the lowest opportunity cost of producing the good.
C) has an absolute advantage in producing the good.
D) receives the highest marginal benefit from the good.
E) can produce the good at the same cost as another producer can.

Question 26

Suppose you have purchased a nonrefundable plane ticket. At the last moment, you cannot take the trip but can still sell the ticket. The cost of sending the ticket to someone through overnight mail is $20, and you have to spend $10 on a courier to get the ticket to the post office for overnight delivery. If you paid $700 for the ticket, which of the following is the minimum amount you should accept for the ticket?

A) $700, because that is what the ticket costs
B) $720, because that is the sum of the cost of the ticket and the cost of sending it to the buyer
C) $730, because that is the sum of the cost of the ticket and the cost of sending it to the buyer
D) More than $730, so that you can make a profit
E) $30, because the $700 is a sunk cost

Question 27

Table 2.2
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\\hline\end{array}$$

-Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of choosing option C when you really wanted option B?

A) $100
B) $25 in terms of C.
C) $50 in terms in terms of B
D) the total value of all the options taken together
E) the value of none of options if B were chosen

Question 28

A cost that has already been incurred and cannot be recovered is known as a(n)_____

A) sunk cost.
B) opportunity cost.
C) direct cost.
D) implicit cost.
E) explicit cost.

Question 29

Table 2.2
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\\hline\end{array}$$

-Refer to Table 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of choosing option D when you really wanted option B?

A) $100
B) $15 in terms of D
C) $50 in terms in terms of B
D) the total value of all the options taken together
E) the value of none of options if B was chosen

Question 30

Table 2.2
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\\hline\end{array}$$

-Refer to Table 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost if you spent all the $100?

A) $100
B) $50 in terms of D
C) $15 in terms in terms of B
D) the total value of all the options
E) the value of the option given up if A were not chosen

Question 31

A country has an absolute advantage in the production of a good if that country _____

A) can produce the good using fewer resources than another country would require.
B) has the lowest opportunity cost of producing the good and can sell it at the highest price.
C) has the lowest opportunity cost of producing the good, regardless of whether it is produced using the fewest resources.
D) has the greatest opportunity cost of producing the good, regardless of whether it is produced using the fewest resources.
E) has the greatest opportunity cost of producing the good and can sell it at the highest price.

Question 32

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Movie } & \$ 0 & \$ 10 & \$ 20 & \$ 30 & \$ 40 \\\hline \text { Restaurant } & \$ 40 & \$ 30 & \$ 20 & \$ 10 & \$ 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option C?

A) $10 in terms of movies
B) $10 in terms of restaurant
C) $20 in terms of movies and $20 in terms of restaurant
D) $40 because you managed to do both
E) $0 because you managed to do both

Question 33

Suppose the line you are standing in at a grocery checkout counter has not moved for 10 minutes. You notice a cashier opening a new one and inviting you to check out. Do you switch to the new cashier or stay put because you have already waited for 10 minutes?

A) stay, because you have already waited for 10 minutes
B) decide to wait for another 5 minutes in case your line speeds up
C) walk out of the store without buying anything because of the wait times
D) be patient and read a magazine while you are waiting
E) switch, because the 10 minutes you waited is a sunk cost

Question 34

Yourealize that total output would increase if you did all the typing and your roommate did all the ironing. You are each _____

A) diversifying.
B) good producers.
C) better off as a result of specialization and exchange.
D) doing so because you get something in return.
E) acting out of concern for the other.

Question 35

You realize that total output would fall if you did some of the typing and ironing and your roommate did some of the typing and ironing. You are each _____

A) good producers.
B) good at both typing and ironing.
C) worse off for not exchanging typing and ironing.
D) doing so because you are not getting something in return.
E) acting out of concern for the other.

Question 36

Table 2.1
$$\begin{array}{l}\text { Table } 2.1\\\begin{array} { | l | l | l | l | l | l | } \hline \text { Item } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\hline \text { Movie } & \$ 0 & \$ 10 & \$ 20 & \$ 30 & \$ 40 \\\hline \text { Restaurant } & \$ 40 & \$ 30 & \$ 20 & \$ 10 & \$ 0 \\\hline\end{array}\end{array}$$

-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option D?

A) $30 in terms of movies
B) $10 in terms of restaurant
C) $30 in terms of restaurant and $10 in terms of movies
D) $40 because you managed to do both
E) $0 because you managed to do both

Question 37

The ability to make something using fewer resources than other producers use is known as _____

A) specialization.
B) exchange.
C) arbitrage.
D) absolute advantage.
E) comparative advantage.

Question 38

A sunk cost _____

A) can only be measured in monetary terms.
B) is a cost that has already been incurred and cannot be recovered.
C) should influence a person's choice if that person is a marginal decision maker.
D) lowers the efficiency of production.
E) should not be considered when making economic decisions.

Question 39

Sunk costs _____

A) can only be measured in monetary terms.
B) are opportunity costs.
C) are marginal costs.
D) lower the efficiency of production.
E) should not be considered when making economic decisions.

Question 40

When deciding how to divide up tasks, ________________ is more important than absolute advantage.

A) opportunity cost
B) specialization
C) sunk choice
D) comparative advantage
E) exchange

Question 41

Don can produce 10 pens or 20 pencils in one hour, while Bob can produce 5 pencils or 15 pens in one hour. Which of the following statements is correct?

A) Bob has an absolute advantage in the production of pencils.
B) Bob has an absolute advantage in the production of pens.
C) Bob has a comparative advantage in the production of pencils.
D) Don has a comparative advantage in the production of pens.
E) Don does not have a comparative advantage in the production of either good.

Question 42

Comparative advantage refers to _____

A) the ability of an individual to produce a greater amount of a good than another individual.
B) the ability of an individual to produce a lesser amount of a good than another individual.
C) the ability of an individual to produce a good at a lower opportunity cost than another individual.
D) the ability of an individual to produce a good at a lower dollar cost than another individual.
E) the ability of an individual to produce a good using fewer labor hours than other individuals.

Question 43

If one person has an absolute advantage in producing two goods, then that person _____

A) must also have a comparative advantage in producing both the goods.
B) cannot benefit from trade.
C) cannot have a comparative advantage in producing either good.
D) will have a comparative advantage in producing only one good.
E) should specialize in the production of both the goods.

Question 44

Hans can do 4 loads of laundry or type 6 pages in an hour. Heidi can do 12 loads of laundry or type 8 pages in an hour. Which of the following is correct?

A) Heidi has both an absolute and a comparative advantage in typing.
B) Heidi has both an absolute and a comparative advantage in doing laundry.
C) Heidi has a comparative advantage in both typing and doing laundry.
D) Hans has both an absolute and a comparative advantage in typing.
E) Hans has an absolute advantage in doing laundry.

Question 45

The law of comparative advantage states that the person who _____ should produce the good.

A) has the lowest opportunity cost of producing a good
B) can produce a good using the fewest resources
C) can produce a good using the most expensive resources
D) has the most desire for a good
E) has produced a particular good in the past

Question 46

Janis mows a lawn in 1 hour and types a paper in 1 hour. Kristen mows a lawn in 2 hours and types a paper in 1 hour. Which of the following statements is true?

A) Kristen has an absolute advantage in typing and a comparative advantage in mowing.
B) Janis has an absolute advantage in both the activities and a comparative advantage in typing.
C) Janis has an absolute advantage in both the activities and a comparative advantage in mowing.
D) The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis.
E) Neither Janis nor Kristen would gain from specialization.

Question 47

If Jeremy has an absolute advantage in cooking and Margaret has an absolute advantage in cleaning, then _____

A) Jeremy has a comparative advantage in cooking and Margaret has a comparative advantage in cleaning.
B) Jeremy has a comparative advantage in cleaning and Margaret has a comparative advantage in cooking.
C) Margaret has a comparative advantage in cleaning, but we can conclude nothing about Jeremy.
D) Jeremy has a comparative advantage in cooking, but we can conclude nothing about Margaret.
E) we can conclude nothing about comparative advantage.

Question 48

If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then _____

A) Monica must have an absolute advantage in baking.
B) Monica must have an absolute advantage in sewing.
C) George must have an absolute advantage in baking.
D) George must have an absolute advantage in sewing.
E) we can conclude nothing about absolute advantage.

Question 49

The law of comparative advantage does not apply to _____

A) entire nations.
B) natural resources.
C) individuals.
D) firms.
E) the regions of a country.

Question 50

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?

A) The opportunity cost of washing a car is greater for Megan.
B) The opportunity cost of washing a car is one dog bath for Jason.
C) Megan can wash two cars in the time it takes Jason to wash a dog.
D) Jason has both a comparative and an absolute advantage in washing a dog.
E) The opportunity cost of washing a dog is lower for Megan.

Question 51

John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?

A) Harry has a comparative advantage in ironing.
B) Harry has a comparative advantage in typing.
C) Harry has an absolute advantage in typing.
D) Harry has an absolute advantage in ironing.
E) Neither can gain from specialization and exchange.

Question 52

Eileen has a comparative advantage over Jan in piano tuning, but not shoe polishing. Which of the following is correct?

A) Jan must have an absolute advantage in piano tuning
B) Eileen must have an absolute advantage in shoe polishing
C) Jan must have a lower opportunity cost of shoe polishing
D) Eileen must have an absolute advantage in shoe polishing and in piano tuning
E) Eileen must have an absolute advantage only in piano tuning

Question 53

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then _____

A) Robin cannot benefit by trading with Robert and should instead specialize in both gardening and baking.
B) Robin can benefit by specializing in gardening if Robert specializes in baking.
C) Robin can benefit by specializing in baking if Robert specializes in gardening.
D) Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what.
E) neither Robin nor Robert can benefit from trading with the other.

Question 54

If labor in the United States is more productive than England, then _____

A) the United States is better off for trading with England.
B) England is worse off for trading with the United States.
C) neither country will benefit from trading.
D) both countries will benefit from trading.
E) England does not have a comparative advantage.

Question 55

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Which of the following is correct?

A) Sami has an absolute and a comparative advantage in both tasks.
B) Leila has an absolute and a comparative advantage in both tasks.
C) Sami has an absolute advantage in both tasks and a comparative advantage in knitting sweaters.
D) Leila has an absolute advantage in both tasks and a comparative advantage in knitting sweaters.
E) Sami has an absolute advantage in both tasks and a comparative advantage in baking cookies.

Question 56

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria, then _____

A) Evan must also have a comparative advantage in cleaning and bookkeeping.
B) Evan must have a comparative advantage in cleaning.
C) Evan must have a comparative advantage in bookkeeping.
D) Gloria has a comparative advantage in neither activity.
E) we can conclude nothing about comparative advantage.

Question 57

_____ states that the person with the lowest opportunity cost should produce the good.

A) Specialization
B) Exchange
C) Arbitrage
D) Absolute advantage
E) Comparative advantage

Question 58

Comparativeadvantage is measured in terms of _____

A) opportunity costs.
B) absolute advantage.
C) sunk costs.
D) dollar costs.
E) trade.

Question 59

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then _____

A) Sarah has a comparative advantage in shoemaking.
B) Daniel has a comparative advantage in shoemaking.
C) Sarah has an absolute and a comparative advantage in shoemaking.
D) Daniel has an absolute and a comparative advantage in shoemaking.
E) Sarah has an absolute advantage in shoemaking.

Question 60

If Sam can chop more carrots per minute than Joe can, then _____

A) Joe has an absolute advantage in carrot chopping.
B) Joe must have a comparative advantage in carrot chopping.
C) Sam has an absolute advantage in carrot chopping.
D) Sam must have a comparative advantage in carrot chopping.
E) we can conclude nothing about absolute advantage.

Question 61

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Josh's opportunity cost of baking one cake is _____

A) painting one room.
B) painting 1/40 of a room.
C) painting 1/60 of a room.
D) painting 2/3 of a room.
E) painting 3/2 of a room.

Question 62

Exhibit 2.1
​

Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. In Costa Rica, the opportunity cost of 1 ton of rice is _____

A) equal to 1/2 of a T-shirt
B) equal to 3/4 of a T-shirt
C) equal to 1 T-shirt
D) equal to 11/2 T-shirts
E) equal to 2 T-shirts

Question 63

Exhibit 2.1
​

Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If the United States produces exactly half of its total production in each good, what will it produce?

A) 100 T-shirts and 100 tons of rice
B) 250 T-shirts and 250 tons of rice
C) 500 T-shirts and 500 tons of rice
D) 750 T-shirts and 750 tons of rice
E) 1000 T-shirts and 1000 tons of rice

Question 64

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Hans's opportunity cost of doing one load of laundry is _____

A) equal to typing 12 papers.
B) equal to typing 8 papers.
C) equal to typing 1 1/2 pages.
D) equal to typing 2/3 of a page.
E) impossible to compute without additional information.

Question 65

Bill trades a gingersnap for a chocolate chip cookie. This is an example of _____

A) barter.
B) a credit transaction.
C) a monetary exchange.
D) privatization.
E) the division of labor.

Question 66

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Sami's opportunity cost of knitting one sweater is _____

A) equal to 480 cookies.
B) equal to 240 cookies.
C) equal to 48 sweaters.
D) equal to 1/48 of a cookie.
E) equal to 48 cookies.

Question 67

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Heidi's opportunity cost of doing one load of laundry is _____

A) equal to typing 4 pages.
B) equal to typing 6 pages.
C) equal to typing 2/3 of a page.
D) equal to typing 3/2 of a page.
E) impossible to compute without additional information.

Question 68

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Helen's opportunity cost of baking one cake is equal to _____

A) painting one room.
B) painting 1/40 of a room.
C) painting 1/60 of a room.
D) painting 2/3 of a room.
E) painting 3/2 of a room.

Question 69

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is correct?

A) The opportunity cost of painting is higher for Helen.
B) The opportunity cost of baking cakes is lower for Josh.
C) Helen's opportunity cost of painting one room is equal to 1/40 of a cake.
D) Josh's opportunity cost of baking one cake is equal to painting 60 rooms.
E) The opportunity cost of cakes cannot be computed.

Question 70

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Leila's opportunity cost of knitting one sweater is _____

A) equal to 240 cookies.
B) equal to 480 cookies.
C) equal to 32 cookies.
D) equal to 1/32 of a cookie.
E) equal to 16 cookies.

Question 71

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Sami's opportunity cost of baking one cookie is _____

A) equal to 1 sweater.
B) equal to 5 sweaters.
C) equal to 48 sweaters.
D) equal to 1/48 of a sweater.
E) equal to 48 cookies.

Question 72

Barter occurs when _____

A) two people share everything.
B) one product is exchanged directly for another product.
C) money is used to buy goods.
D) money in different currencies is exchanged directly.
E) goods are used to buy money.

Question 73

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Hans's opportunity cost of typing one page is:

A) equal to 12 loads of laundry.
B) equal to 8 loads of laundry.
C) equal to 3/2 of a load of laundry.
D) equal to 2/3 of a load of laundry.
E) impossible to compute without additional information.

Question 74

Money facilitates trade because _____

A) it eliminates the need for specialization.
B) it prevents people from taking advantage of each other.
C) it serves as a medium of exchange.
D) the division of labor allows goods to be produced at a lower cost.
E) it is considered less valuable than the goods it is used to buy.

Question 75

Exhibit 2.1
​

Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If Costa Rica produces exactly half of its total production in each good, what will it produce?

A) 100 T-shirts and 100 tons of rice
B) 200 T-shirts and 200 tons of rice
C) 250 T-shirts and 250 tons of rice
D) 300 T-shirts and 300 tons of rice
E) 400 T-shirts and 400 tons of rice

Question 76

Exhibit 2.1
​

Refer to Exhibit 2.1, which shows the production for rice and t-shirts for two countries: Costa Rica and the United States. Assume exactly country produces half of its total production in each good and they are the only producers of T-shirts and rice. What is the total production of T-shirts and rice?

A) 1500 T-shirts and 1500 tons of rice.
B) 1000 T-shirts and 1500 tons of rice.
C) 1000 T-shirts and 500 tons of rice.
D) 750 T-shirts and 750 tons of rice.
E) 500 T-shirts and 1000 tons of rice.

Question 77

Exhibit 2.1
​

Refer to Exhibit 2.1 which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. In the United States, the opportunity cost of 1 ton of rice is: For answer to be correct, for the United States, on the vertical axis, maximum T-shirt production should touch 1000 units.

A) equal to 1/2 of a T-shirt.
B) equal to 3/4 of a T-shirt.
C) equal to 1 T-shirt.
D) equal to 11/2 T-shirts.
E) equal to 2 T-shirts.

Question 78

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Heidi's opportunity cost of typing one page is _____

A) equal to 4 loads of laundry.
B) equal to 6 loads of laundry.
C) equal to 3/2 of a load of laundry.
D) equal to 2/3 of a load of laundry.
E) impossible to compute without additional information.

Question 79

Barter is _____

A) illegal in the United States.
B) an efficient system of exchange.
C) most useful when there is much specialization and international trade.
D) only possible if money is used as a medium of exchange.
E) the direct exchange of goods without the use of money.

Question 80

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Leila's opportunity cost of baking one cookie is _____

A) equal to 5 sweaters.
B) equal to 15 sweaters.
C) equal to 32 sweaters.
D) equal to 1/32 of a sweater.
E) equal to 480 sweaters.