Question 1

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.The opportunity cost of 1 unit of cheese for Spain is

Accepted Answer

A)  1/2 unit of bread. 
B)  2 hours of labor. 
C)  2 units of bread. 
D)  4 hours of labor.

Question 2

Specialization and trade can make everyone better off if a person can obtain goods at prices that are less than that person's opportunity cost.

Accepted Answer

A) True 
 B)False

Question 3

Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
 
-Refer to Table 3-4.The rancher has a comparative advantage in the production of

Accepted Answer

A)  meat. 
B)  potatoes. 
C)  both goods. 
D)  neither good.

Question 4

Figure 3-5
Hosne’s Production Possibilities Frontier
 
Merve’s Production Possibilities Frontier

-Refer to Figure 3-5.Hosne's opportunity cost of one purse is

Accepted Answer

A)  4/5 wallet and Merve's opportunity cost of one purse is 2/3 wallet. 
B)  4/5 wallet and Merve's opportunity cost of one purse is 3/2 wallets. 
C)  5/4 wallets and Merve's opportunity cost of one purse is 2/3 wallet. 
D)  5/4 wallets and Merve's opportunity cost of one purse is 3/2 wallets.

Question 5

Table 3-6
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
 
-Refer to Table 3-6.The opportunity cost of 1 toaster for Miguel is

Accepted Answer

A)  1/2 mixer. 
B)  2 hours of labor. 
C)  2 mixers. 
D)  20 hours of labor.

Question 6

Trade can make everybody better off because it

Accepted Answer

A)  increases cooperation among nations. 
B)  allows people to specialize according to comparative advantage. 
C)  requires some workers in an economy to be retrained. 
D)  reduces competition among domestic companies.

Question 7

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.Assume that England and Spain each has 40 labor hours available.If each country divides its time equally between the production of cheese and bread,then total production is

Accepted Answer

A)  20 units of cheese and 5 units of bread. 
B)  25 units of cheese and 7.5 units of bread. 
C)  40 units of cheese and 10 units of bread. 
D)  50 units of cheese and 15 units of bread.

Question 8

Table 3-9
Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies.
 
-Refer to Table 3-9.Which of the following points would not be on Jim's production possibilities frontier,based on a 40-hour week?

Accepted Answer

A)  (0 computers set up,60 computers tested) 
B)  (40 computers set up,30 computers tested) 
C)  (60 computers set up,12 computers tested) 
D)  (72 computers set up,6 computers tested)

Question 9

The gains from specialization and trade are based on absolute advantage.

Accepted Answer

A) True 
 B)False

Question 10

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.Which of the following combinations of cheese and bread could Spain produce in 40 hours?

Accepted Answer

A)  2.25 units of cheese and 4 units of bread. 
B)  5.5 units of cheese and 3 units of bread. 
C)  7 units of cheese and 1.5 units of bread. 
D)  10 units of cheese and 5 units of bread.

Question 11

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks.Which of the following is not possible?

Accepted Answer

A)  Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks. 
B)  Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks. 
C)  Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats. 
D)  Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.

Question 12

Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
 
-Refer to Table 3-8.The opportunity cost of 1 parasol for Min is

Accepted Answer

A)  1/3 plate. 
B)  1/2 plate. 
C)  2 plates. 
D)  3 plates.

Question 13

Table 3-17
US and French Production Opportunities
 
-Refer to Table 3-17 The opportunity costs for the US and France are as follows:

Accepted Answer

A)  In the US 1 million gallons of wine costs 1/2 million pounds of cheese and in France 1 million gallons of wine costs 2 million pounds of cheese. 
B)  In the US 1 million gallons of wine costs 2 million pounds of cheese and in France 1 million gallons of wine costs 1/2 million pounds of cheese. 
C)  In the US 1 million pounds of cheese costs 1/2 million gallons of wine and in France 1 million pounds of cheese costs 2 million gallons of wine. 
D)  In the US 1 million pounds of cheese costs 16 million gallons of wine and in France 1 million pounds of cheese costs 8 million gallons of wine.

Question 14

Table 3-9
Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies.
 
-Refer to Table 3-9.Barb's opportunity cost of testing one computer is setting up

Accepted Answer

A)  4/5 computer and Jim's opportunity cost of testing one computer is setting up 3/4 computer. 
B)  4/5 computer and Jim's opportunity cost of testing one computer is setting up 4/3 computers. 
C)  5/4 computers and Jim's opportunity cost of testing one computer is setting up 3/4 computer. 
D)  5/4 computers and Jim's opportunity cost of testing one computer is setting up 4/3 computers.

Question 15

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.What are Alice and Betty's opportunity costs of 1 pizza?

Accepted Answer

A)  Alice's opportunity cost of 1 pizza is 1/2 of a pitcher of lemonade and Betty's opportunity cost of 1 pizza is 2/3 of a pitcher of lemonade. 
B)  Alice's opportunity cost of 1 pizza is 1 pitcher of lemonade and Betty's opportunity cost of 1 pizza is 3 pitchers of lemonade. 
C)  Alice's opportunity cost of 1 pizza is 2 pitchers of lemonade and Betty's opportunity cost of 1 pizza is 1.5 pitchers of lemonade. 
D)  Alice's opportunity cost of 1 pizza is 400 pitchers of lemonade and Betty's opportunity cost of 1 pizza is 450 pitchers of lemonade.

Question 16

A certain cowboy spends 10 hours per day mending fences and herding cattle.For the cowboy,a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day)is called his

Accepted Answer

A)  line of tastes. 
B)  trade-off curve. 
C)  production possibilities frontier. 
D)  consumption possibilities frontier.

Question 17

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.The opportunity cost of 1 unit of bread for Spain is

Accepted Answer

A)  1/2 unit of cheese. 
B)  1/2 hour of labor. 
C)  2 units of cheese. 
D)  8 hours of labor.

Question 18

The gains from trade are

Accepted Answer

A)  evident in economic models,but seldom observed in the real world. 
B)  evident in the real world,but impossible to capture in economic models. 
C)  a result of more efficient resource allocation than would be observed in the absence of trade. 
D)  based on the principle of absolute advantage.

Question 19

International trade can make some individuals within a country worse off,even as it makes the country as a whole better off.

Accepted Answer

A) True 
 B)False

Question 20

Figure 3-7
Bintu’s Production Possibilities Frontier	
 Juba’s Production Possibilities F
-Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together not make in a given 4-hour production period?

Accepted Answer

A)  3 bowls and 9.5 cups 
B)  4.5 bowls and 6 cups 
C)  5 bowls and 4 cups 
D)  6 bowls and 1 cups

Exam 3: Interdependence and the Gains From Trade

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.The opportunity cost of 1 unit of cheese for Spain is

Specialization and trade can make everyone better off if a person can obtain goods at prices that are less than that person's opportunity cost.

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The rancher has a comparative advantage in the production of

Figure 3-5 Hosne’s Production Possibilities Frontier Merve’s Production Possibilities Frontier -Refer to Figure 3-5.Hosne's opportunity cost of one purse is

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.The opportunity cost of 1 toaster for Miguel is

Trade can make everybody better off because it

The gains from specialization and trade are based on absolute advantage.

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.Which of the following combinations of cheese and bread could Spain produce in 40 hours?

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks.Which of the following is not possible?

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8.The opportunity cost of 1 parasol for Min is

Table 3-17 US and French Production Opportunities -Refer to Table 3-17 The opportunity costs for the US and France are as follows:

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Barb's opportunity cost of testing one computer is setting up

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.What are Alice and Betty's opportunity costs of 1 pizza?

A certain cowboy spends 10 hours per day mending fences and herding cattle.For the cowboy,a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day) is called his

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.The opportunity cost of 1 unit of bread for Spain is

The gains from trade are

International trade can make some individuals within a country worse off,even as it makes the country as a whole better off.