Question 1

Figure 3-11
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 3-11. For Bonovia, what is the opportunity cost of a pound of cheese?

Accepted Answer

A) 0.8 pounds of ham 
B) 1.25 pounds of ham 
C) 8 pounds of ham 
D) 16 pounds of ham

Question 2

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. 
-Refer to Table 3-7. 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 3

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. Without trade, England produced and consumed 32 units of cheese and 2 units of bread and Spain produced and consumed 6 units of cheese and 2 units of bread. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread. As a result, England gained

Accepted Answer

A) 0 units of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread. 
B) 1 unit of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread. 
C) 7 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread. 
D) 33 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.

Question 4

Table 3-13
The following table contains some production possibilities for an economy for a given month. $$\begin{array} { | c | c | } 
\hline \text { SWratari } & \text { Glavi } \
\hline 4 & 300 \
\hline 6 & ? \
\hline 8 & 100 \
\hline
\end{array}$$
-Refer to Table 3-13. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  100. 
B)  150. 
C)  200. 
D)  250.

Question 5

Tom Brady should probably not mow his own lawn because

Accepted Answer

A) his opportunity cost of mowing his lawn is higher than the cost of paying someone to mow it for him. 
B) he has a comparative advantage in mowing his lawn relative to a landscaping service. 
C) he has an absolute advantage in mowing his lawn relative to a landscaping service. 
D) he might sprain his ankle.

Question 6

Figure 3-9
   
-Refer to Figure 3-9. Azerbaijan has an absolute advantage in the production of

Accepted Answer

A) bolts and a comparative advantage in the production of bolts. 
B) bolts and a comparative advantage in the production of nails. 
C) nails and a comparative advantage in the production of bolts. 
D) nails and a comparative advantage in the production of nails.

Question 7

Figure 3-8
   
-Refer to Figure 3-8. Chile's opportunity cost of one pound of soybeans is

Accepted Answer

A) 3/4 pound of coffee and Colombia's opportunity cost of one pound of soybeans is 1/2 pound of coffee. 
B) 3/4 pound of coffee and Colombia's opportunity cost of one pound of soybeans is 2 pounds of coffee. 
C) 4/3 pounds of coffee and Colombia's opportunity cost of one pound of soybeans is 1/2 pound of coffee. 
D) 4/3 pounds of coffee and Colombia's opportunity cost of one pound of soybeans is 2 pounds of coffee.

Question 8

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

Accepted Answer

A) True 
 B)False

Question 9

Figure 3-11
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 3-11. If the production possibilities frontier shown is for 240 hours of production, then how long does it take Bonovia to make one pound of cheese?

Accepted Answer

A) 3/5 hour 
B) 3/4 hour 
C) 4/3 hours 
D) 5/3 hours

Question 10

The principle of comparative advantage does not provide answers to certain questions. One of those questions is

Accepted Answer

A) Is it possible for specialization and trade to benefit more than one party to a trade? 
B) Is it possible for specialization and trade to increase total output of traded goods? 
C) Do opportunity costs play a role in people's decisions to specialize in certain activities? 
D) What determines the price at which trade takes place?

Question 11

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 setting up one computer is testing

Accepted Answer

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

Question 12

Table 3-13
The following table contains some production possibilities for an economy for a given month. $$\begin{array} { | c | c | } 
\hline \text { SWratari } & \text { Glavi } \
\hline 4 & 300 \
\hline 6 & ? \
\hline 8 & 100 \
\hline
\end{array}$$
-Refer to Table 3-13. If the production possibilities frontier is a straight line, then "?" must be

Accepted Answer

A)  100. 
B)  150. 
C)  200. 
D)  250.

Question 13

Figure 3-8
 
-Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

Accepted Answer

A) 4 pounds of coffee and 16 pounds of soybeans 
B) 8 pounds of coffee and 15 pounds of soybeans 
C) 16 pounds of coffee and 10 pounds of soybeans 
D) 24 pounds of coffee and 4 pounds of soybeans

Question 14

For a self-sufficient producer, the production possibilities frontier

Accepted Answer

A) is the same as the consumption possibilities frontier. 
B) is greater than the consumption possibilities frontier. 
C) is less than the consumption possibilities frontier. 
D) is always a straight line.

Question 15

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

Accepted Answer

A) True 
 B)False

Question 16

An assumption of the production possibilities frontier model is that technology is fixed.

Accepted Answer

A) True 
 B)False

Question 17

Figure 3-4
   
-Refer to Figure 3-4. Perry has a comparative advantage in the production of

Accepted Answer

A) novels and Jordan has a comparative advantage in the production of poems. 
B) poems and Jordan has a comparative advantage in the production of novels. 
C) novels and Jordan has a comparative advantage in the production of neither good. 
D) neither good and Jordan has a comparative advantage in the production of novels.

Question 18

Figure 3-4
   
-Refer to Figure 3-4. Jordan should specialize in the production of

Accepted Answer

A) novels. 
B) poems. 
C) both goods. 
D) neither good.

Question 19

Figure 3-9
   
-Refer to Figure 3-9. Azerbaijan's opportunity cost of one bolt is

Accepted Answer

A) 1/4 nail and Uzbekistan's opportunity cost of one bolt is 1/2 nail. 
B) 1/4 nail and Uzbekistan's opportunity cost of one bolt is 2 nails. 
C) 4 nails and Uzbekistan's opportunity cost of one bolt is 1/2 nail. 
D) 4 nails and Uzbekistan's opportunity cost of one bolt is 2 nails.

Question 20

Table 3-12
 
-Refer to Table 3-12. Which of the following combinations of meat and potatoes could the rancher not produce in 40 hours?

Accepted Answer

A) 2 pounds of meat and 3 pounds of potatoes. 
B) 3 pounds of meat and 3 pounds of potatoes. 
C) 4 pounds of meat and 2 pounds of potatoes. 
D) 5 pounds of meat and 2 pound of potatoes.

Exam 3: Interdependence and the Gains From Trade

Figure 3-11 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 3-11. For Bonovia, what is the opportunity cost of a pound of cheese?

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7. Korea should specialize in the production of

Tom Brady should probably not mow his own lawn because

Figure 3-9 -Refer to Figure 3-9. Azerbaijan has an absolute advantage in the production of

Figure 3-8 -Refer to Figure 3-8. Chile's opportunity cost of one pound of soybeans is

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

The principle of comparative advantage does not provide answers to certain questions. One of those questions is

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 setting up one computer is testing

Figure 3-8 -Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

For a self-sufficient producer, the production possibilities frontier

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

An assumption of the production possibilities frontier model is that technology is fixed.

Figure 3-4 -Refer to Figure 3-4. Perry has a comparative advantage in the production of

Figure 3-4 -Refer to Figure 3-4. Jordan should specialize in the production of

Figure 3-9 -Refer to Figure 3-9. Azerbaijan's opportunity cost of one bolt is

Table 3-12 -Refer to Table 3-12. Which of the following combinations of meat and potatoes could the rancher not produce in 40 hours?