Question 1

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier  
-Refer to Figure 3-4. If Lisa and Bryce both spend all of their time producing jackets, then total production is

Accepted Answer

A) 2 jackets. 
B) 6 jackets. 
C) 24 jackets. 
D) 26 jackets.

Question 2

Table 3-13
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
​ 
-Refer to Table 3-13. Which of the following points would be on Shantala's production possibilities frontier, based on a 40-hour week?

Accepted Answer

A) (120 cellular phones programmed, 250 cellular phones tested) 
B) (180 cellular phones programmed, 150 cellular phones tested) 
C) (240 cellular phones programmed, 600 cellular phones tested) 
D) More than one of the above would be on Shantala's production possibilities frontier.

Question 3

When describing the opportunity cost of two producers, economists use the term

Accepted Answer

A) natural advantage. 
B) trading advantage. 
C) comparative advantage. 
D) absolute advantage.

Question 4

Figure 3-15
Perry's Production Possibilities Frontier
Jordan's Production Possibilities Frontier  
-Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Accepted Answer

A) Perry and Jordan will both gain from this trade. 
B) Perry will gain from this trade, but Jordan will not. 
C) Jordan will gain from this trade, but Perry will not. 
D) neither Perry nor Jordan will gain from this trade.

Question 5

Figure 3-12
Argentina's Production Possibilities Frontier
Peru's Production Possibilities Frontier  
-Charlotte can produce pork and beans and can switch between producing them at a constant rate. If it takes her 10 hours to produce a pound of pork and 5 hours to produce a pound of beans, what is her opportunity cost of pork and what is her opportunity cost of beans?

Accepted Answer

The answer of Figure 3-12
Argentina's Production Possibilities Frontier
Peru's Production Possibilities...

Question 6

Table 3-18
The following table contains some production possibilities for an economy for a given month. 
-Refer to Table 3-18. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A) 150. 
B) 225. 
C) 300. 
D) 375.

Question 7

​When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit.

Accepted Answer

A) True 
 B)False

Question 8

Figure 3-18
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier  
-Refer to Figure 3-18. Bintu has an absolute advantage in the production of

Accepted Answer

A) bowls and Juba has an absolute advantage in the production of cups. 
B) cups and Juba has an absolute advantage in the production of bowls. 
C) both goods and Juba has an absolute advantage in the production of neither good. 
D) neither good and Juba has an absolute advantage in the production of both goods.

Question 9

Table 3-39
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
​
​  ​
-Refer to Table 3-39. Korea should specialize in the production of

Accepted Answer

A) cars and import airplanes. 
B) airplanes and import cars. 
C) both goods and import neither good. 
D) neither good and import both goods.

Question 10

When a country has a comparative advantage in producing a certain good,

Accepted Answer

A) the country should import that good. 
B) the country should produce just enough of that good for its own consumption. 
C) the country's opportunity cost of that good is high relative to other countries' opportunity costs of that same good. 
D) None of the above is correct.

Question 11

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is not correct?

Accepted Answer

A) Trade allows for specialization. 
B) Trade has the potential to benefit all nations. 
C) Trade allows nations to consume outside of their production possibilities curves. 
D) Absolute advantage is the driving force of specialization.

Question 13

Adam Smith asserted that a person should never attempt to make at home

Accepted Answer

A) what it will cost him more to make than to buy. 
B) any good in which that person does not have an absolute advantage. 
C) any luxury good. 
D) any necessity.

Question 14

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

Accepted Answer

A) True 
 B)False

Question 15

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Together, they could produce more output in total if Moira knits only sweaters and Tori knits only scarves.

Accepted Answer

A) True 
 B)False

Question 16

Figure 3-23
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-23. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

Accepted Answer

A) 0.75 pound. 
B) 0.80 pound. 
C) 1.00 pounds. 
D) 1.25 pounds.

Question 17

Scenario 3-1
The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time.
Greg's Production Possibilities
Catherine's Production Possibilities  
-Refer to Scenario 3-1. What is Greg's opportunity cost of producing cake? Explain how you derived your answer.

Accepted Answer

The answer of Scenario 3-1
The production possibilities frontiers below show...

Question 18

Figure 3-14
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier  
-Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

Accepted Answer

A) 27. 
B) 48. 
C) 108. 
D) 144.

Question 19

Figure 3-15
Perry's Production Possibilities Frontier
Jordan's Production Possibilities Frontier  
-Refer to Figure 3-15. The opportunity cost of 1 poem for Perry is

Accepted Answer

A) 1/12 novel. 
B) 1/6 novel. 
C) 2 novels. 
D) 6 novels.

Question 20

Table 3-41
​
​ 
-Refer to Table 3-41. If the two countries specialize and trade with each other, which country will import radios?

Accepted Answer

The answer of Table 3-41
​
​ 
-Refer to Table 3-41. If...

Exam 3: Interdependence and the Gains From Trade

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce both spend all of their time producing jackets, then total production is

When describing the opportunity cost of two producers, economists use the term

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Table 3-18 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-18. If the production possibilities frontier is bowed outward, then "?" could be

When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit.

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has an absolute advantage in the production of

Table 3-39 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-39. Korea should specialize in the production of

When a country has a comparative advantage in producing a certain good,

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Which of the following statements is not correct?

Adam Smith asserted that a person should never attempt to make at home

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Together, they could produce more output in total if Moira knits only sweaters and Tori knits only scarves.

Figure 3-23 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-23. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Perry is

Table 3-41 -Refer to Table 3-41. If the two countries specialize and trade with each other, which country will import radios?

Exam 3: Interdependence and the Gains From Trade

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce both spend all of their time producing jackets, then total production is

When describing the opportunity cost of two producers, economists use the term

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Table 3-18 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-18. If the production possibilities frontier is bowed outward, then "?" could be

​When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit.

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has an absolute advantage in the production of

Table 3-39 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ ​ ​ -Refer to Table 3-39. Korea should specialize in the production of

When a country has a comparative advantage in producing a certain good,

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Which of the following statements is not correct?

Adam Smith asserted that a person should never attempt to make at home

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Together, they could produce more output in total if Moira knits only sweaters and Tori knits only scarves.

Figure 3-23 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-23. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Perry is

Table 3-41 ​ ​ -Refer to Table 3-41. If the two countries specialize and trade with each other, which country will import radios?

When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit.

Table 3-39 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-39. Korea should specialize in the production of

Table 3-41 -Refer to Table 3-41. If the two countries specialize and trade with each other, which country will import radios?