Question 1

Mrs.Abel has a comparative advantage in producing cabbage if,in comparison to Mr.Lace,Mrs.Abel can grow cabbage

Accepted Answer

A)  with less labor. 
B)  with fewer inputs. 
C)  at a lower equilibrium. 
D)  at a lower opportunity cost. 
E)  with less technology.

Question 2

Suppose someone is studying a production possibilities frontier (PPF)that has a bowed-out shape relative to the origin.What causes this shape?

Accepted Answer

A)  economic growth 
B)  the law of increasing relative cost 
C)  absolute advantage 
D)  normative economics 
E)  more resources

Question 3

Suppose Hoda is a brilliant attorney who can draft especially persuasive legal briefs.She also happens to possess some excellent administrative skills such as typing,filing,assembling binders and notes,and making reservations.Which best describes whether Hoda should hire an administrative assistant to help her?

Accepted Answer

A)  Hoda should not hire an administrative assistant because she has an absolute advantage in performing administrative functions. 
B)  Hoda should not hire an administrative assistant because she likely has a comparative advantage in performing administrative functions. 
C)  Hoda should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs. 
D)  Hoda should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions. 
E)  Hoda should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs.

Question 4

Mikhail and Stefan are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.
 Use this table to answer the following questions.
-Based on the table,does Mikhail or Stefan have a comparative advantage?

Accepted Answer

A)  Yes,Mikhail has a comparative advantage in both sculptures and paintings. 
B)  Yes,Stefan has a comparative advantage in both sculptures and paintings. 
C)  Yes,Mikhail has a comparative advantage in paintings,and Stefan has a comparative advantage in sculptures. 
D)  Yes,Mikhail has a comparative advantage in sculptures,and Stefan has a comparative advantage in paintings. 
E)  No,neither has a comparative advantage.

Question 5

Which of the following is a positive statement?

Accepted Answer

A)  Individuals should make good long-term decisions. 
B)  Corporations should maximize shareholder value. 
C)  The government should reduce the level of unemployment. 
D)  The most important effects of policy happen in the short term. 
E)  The unemployment rate is 8 percent.

Question 6

The existing entries in the following table show the maximum quantities of milk shakes or fruit smoothies the college president and dining hall staffer could make during an afternoon shift,given a fixed amount of resources.
a.Fill in the remaining part of the table (be sure to label the units)and answer the questions below.
  b.Who has a comparative advantage in producing smoothies?
c.Who has an absolute advantage in producing milk shakes?

Accepted Answer

The answer of The existing entries in the following table...

Question 7

A positive statement

Accepted Answer

A)  is a claim that can be tested. 
B)  is a statement about what ought to be. 
C)  is a declaration of opinion. 
D)  is a claim that cannot be tested. 
E)  cannot be evaluated using the scientific method.

Question 8

use the figures  below  to answer the following questions :the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between building wooden boats and solving crimes.

-What is Gibbs's opportunity cost of solving a crime?

Accepted Answer

A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat

Question 9

Suppose someone finds a production possibilities frontier (PPF)that is shaped like a straight line.What can one determine about the production of the two goods?

Accepted Answer

A)  Production of the two goods is subject to decreasing relative cost. 
B)  Production of the two goods is subject to increasing relative cost. 
C)  Production of the two goods is subject to constant opportunity cost anywhere along the PPF. 
D)  One producer must have an absolute advantage in production. 
E)  More resources will not cause the PPF to shift.

Question 10

When testing a model rocket on a campus quad,which of the following would be an endogenous factor?

Accepted Answer

A)  the current wind speed across the quad 
B)  the quad's elevation and air pressure 
C)  the extent of precipitation 
D)  the gravitational pull of Earth 
E)  the size of the rocket engine

Question 11

On the television show MythBusters,the hosts design experiments,collect data,and test theories based on popular myths.This is an example of

Accepted Answer

A)  the scientific method. 
B)  economic growth. 
C)  gains from trade. 
D)  production possibilities. 
E)  absolute advantage.

Question 12

Mikhail and Stefan are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the following questions.
 
-What is Stefan's opportunity cost of a sculpture?

Accepted Answer

A)  1/2 painting 
B)  1/3 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  3/5 sculpture

Question 13

Forgoing current consumption so that those resources can be used to produce new capital is called

Accepted Answer

A)  absolute advantage. 
B)  comparative advantage. 
C)  investment. 
D)  scarcity. 
E)  saving.

Question 14

Think of the production possibilities frontier (PPF)model.When society is producing the largest possible output from its resources,it is operating

Accepted Answer

A)  inefficiently. 
B)  efficiently. 
C)  with no opportunity cost. 
D)  inside (within)the PPF. 
E)  beyond its opportunity cost.

Question 15

Goods that are produced now so that they can be used to produce other goods in the future are called ________ goods.

Accepted Answer

A)  capital 
B)  consumer 
C)  investment 
D)  normal 
E)  opportunity

Question 16

The ________ states that the opportunity cost of producing a good always rises as one produces more of it.

Accepted Answer

A)  law of increasing relative cost 
B)  law of positive economics 
C)  law of demand 
D)  production possibilities frontier (PPF)model 
E)  zero-sum game

Question 17

Ceteris paribus means

Accepted Answer

A)  in sets of two. 
B)  constant opportunity cost. 
C)  other things being equal. 
D)  buyer beware. 
E)  there is no reason to argue about people's tastes.

Question 18

use the figure below  to answer the following questions

-Which of the following represents a point that is unattainable with current resources and technology?

Accepted Answer

A)  point B 
B)  point C 
C)  point D 
D)  point E 
E)  point F

Question 19

Opportunity cost is evident on the production possibilities frontier (PPF)graph

Accepted Answer

A)  as we move from one point on the frontier to another point on the frontier. 
B)  as we move from the origin to any inefficient point. 
C)  as we move from one unattainable point to an efficient point on the frontier. 
D)  as we move from an inefficient point to the origin. 
E)  at any one single point on the graph.

Question 20

The figure depicts a shift in a society's production possibilities frontier (PPF)for the manufacture of trains and planes: train-manufacturing capacity expands while plane-manufacturing capacity shrinks. Refer to this figure to answer the following questions.

-Which point represents an efficient level of output both before and after the shift?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Exam 2: Model Building and Gains From Trade

Mrs.Abel has a comparative advantage in producing cabbage if,in comparison to Mr.Lace,Mrs.Abel can grow cabbage

Suppose someone is studying a production possibilities frontier (PPF) that has a bowed-out shape relative to the origin.What causes this shape?

Mikhail and Stefan are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day. Use this table to answer the following questions. -Based on the table,does Mikhail or Stefan have a comparative advantage?

Which of the following is a positive statement?

A positive statement

use the figures below to answer the following questions :the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. -What is Gibbs's opportunity cost of solving a crime?

Suppose someone finds a production possibilities frontier (PPF) that is shaped like a straight line.What can one determine about the production of the two goods?

When testing a model rocket on a campus quad,which of the following would be an endogenous factor?

On the television show MythBusters,the hosts design experiments,collect data,and test theories based on popular myths.This is an example of

Mikhail and Stefan are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the following questions. -What is Stefan's opportunity cost of a sculpture?

Forgoing current consumption so that those resources can be used to produce new capital is called

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating

Goods that are produced now so that they can be used to produce other goods in the future are called ________ goods.

The ________ states that the opportunity cost of producing a good always rises as one produces more of it.

Ceteris paribus means

use the figure below to answer the following questions -Which of the following represents a point that is unattainable with current resources and technology?

Opportunity cost is evident on the production possibilities frontier (PPF) graph