Question 1

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _____ advantage at producing nets, but does not have a(n) _____ advantage at producing fish.

Accepted Answer

A)  absolute; comparative
B)  comparative; absolute
C)  absolute; absolute
D)  comparative; comparativeE) All of the above
F) B) and C)

Question 2

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n) _____ and should _____.

Accepted Answer

A)  both goods; absolute advantage in both goods; not trade
B)  only shoes; comparative advantage at producing shoes; trade for apples.
C)  only apples; comparative advantage at producing apples; not trade
D)  only apples; comparative advantage at producing apples; trade for shoes.E) C) and D)
F) All of the above

Question 3

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost of one pair of shoes for the United States is _____, while the opportunity cost of one pair of shoes for Canada is ______.

Accepted Answer

A)  5 apples; 2 apples
B)  1/5 apple; 1/2 apple
C)  2,000 apples; 200 apples
D)  100 apples; 20 applesE) A) and B)
F) A) and C)

Question 4

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one avocado is:

Accepted Answer

A)  2/3 bananas.
B)  2 bananas.
C)  1.5 bananas.
D)  210 bananas.E) None of the above
F) A) and B)

Question 5

The invisible hand refers to the coordination that occurs from:

Accepted Answer

A)  everyone working in his or her own self-interest.
B)  a government agency finding efficiencies.
C)  everyone working for the overall good of society.
D)  a government coordinating economic activity.E) B) and C)
F) C) and D)

Question 6

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Accepted Answer

A)  Chile should make televisions and trade them to the United States in exchange for potatoes, because the United States has an absolute advantage in the production of potatoes.
B)  Chile should make potatoes and trade them to the United States in exchange for televisions, because the United States has an absolute advantage in the production of potatoes.
C)  The United States can benefit from trading with Chile, but Chile will receive no benefit.
D)  The United States has an absolute advantage at producing both televisions and potatoes.E) A) and C)
F) All of the above

Question 7

When a producer has an absolute advantage at producing a good, it means the producer:

Accepted Answer

A)  can produce more of that good than others with the same amount of resources.
B)  has the ability to produce a good or service at a lower opportunity cost than others.
C)  has no reason to trade with others.
D)  is less efficient than other producers.E) C) and D)
F) All of the above

Question 8

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. In one day, Tom can produce either:

Accepted Answer

A)  (16 chairs, 4 tables) or (8 chairs, 2 tables) .
B)  (8 chairs, 2 tables) or (4 chairs, 6 tables) .
C)  (8 chairs, 2 tables) or (4 chairs, 3 tables) .
D)  (12 chairs, 3 tables) or (8 chairs, 3 tables) .E) B) and D)
F) All of the above

Question 9

When an economist says that a country can experience gains from trade, this means it can:

Accepted Answer

A)  consume at a point outside its production possibilities frontier.
B)  increase its exports.
C)  increase the efficiency of its production.
D)  experience a bowed-out production possibilities frontier.E) All of the above
F) None of the above

Question 10

If a country has an absolute advantage at producing one good, which of the following is true?

Accepted Answer

A)  It cannot have an absolute advantage at producing the other good.
B)  It must also have a comparative advantage at producing both goods.
C)  It can produce more of that good than the other good.
D)  It can produce more of that good given the same resources.E) None of the above
F) A) and C)

Question 11

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Accepted Answer

A)  (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars) 
B)  (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars) 
C)  (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars) 
D)  (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars) E) A) and B)
F) All of the above

Question 12

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Accepted Answer

A)  Bangladesh should specialize in glove production because it has a comparative advantage at producing gloves.
B)  Bangladesh should specialize in radish production because it has a comparative advantage at producing radishes.
C)  Bangladesh should produce both gloves and radishes because it has an absolute advantage at producing both goods.
D)  Bangladesh should produce only radishes because it has an absolute advantage at producing radishes.E) C) and D)
F) All of the above

Question 13

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a comparative advantage at producing:

Accepted Answer

A)  iPhones.
B)  iPads.
C)  both iPhones and iPads.
D)  neither iPhones nor iPads.E) All of the above
F) B) and C)

Question 14

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Accepted Answer

A)  They will be forced to consume less of the goods the country had a comparative advantage at producing.
B)  They will be better off than before as long as the country has an absolute advantage at producing any good.
C)  They will be better off than before only if the country has an absolute advantage at producing most of the goods they consume.
D)  They will be better off than before only if they have a comparative advantage at producing all goods.E) All of the above
F) None of the above

Question 15

If we consider the reality that each worker has different skills, then the production possibilities frontier should:

Accepted Answer

A)  be bowed inward.
B)  be bowed outward.
C)  be a straight line.
D)  shift outward.E) B) and D)
F) All of the above

Question 16

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Accepted Answer

A)  The U.S. has both an absolute advantage and a comparative advantage at producing shoes.
B)  The U.S. has both an absolute advantage and a comparative advantage at producing apples.
C)  The U.S. has an absolute advantage at producing both goods, but no comparative advantage
D)  The U.S. has both an absolute advantage and a comparative advantage at producing both goods.E) A) and B)
F) A) and C)

Question 17

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. In one day, Jerry can produce:

Accepted Answer

A)  14 chairs and 7 tables.
B)  12 chairs and 6 tables.
C)  10 chairs and 5 tables.
D)  6 chairs and 4 tables.E) C) and D)
F) All of the above

Question 18

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. Because Tom has a _____ opportunity cost for one table compared to Jerry, we know Tom has _____.

Accepted Answer

A)  higher; a comparative advantage at producing tables
B)  lower; a comparative advantage at producing tables
C)  similar; no advantage at producing either good
D)  higher; a comparative advantage at producing chairsE) None of the above
F) A) and D)

Question 19

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Accepted Answer

A)  It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
B)  It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
C)  It is the same as that of Country B; Country A will not benefit from trade and should refrain.
D)  It should have no effect on Country A's decision to trade; absolute advantage drives that decision.E) None of the above
F) All of the above

Question 20

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Accepted Answer

A)  countries import and export certain goods.
B)  individuals typically work at one job, and buy the other goods and services they need.
C)  we allow ourselves to be interdependent on others.
D)  All of these statements are true.E) A) and D)
F) B) and C)

Exam 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Correct Answer
verified

The invisible hand refers to the coordination that occurs from:

Correct Answer
verified

Correct Answer
verified

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Correct Answer
verified

Correct Answer
verified

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Correct Answer
verified

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a comparative advantage at producing:

Correct Answer
verified

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _ advantage at producing nets, but does not have a(n) _ advantage at producing fish.

Correct Answer
verified

If a country has an absolute advantage at producing one good, which of the following is true?

Correct Answer
verified

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce ___ because it has a(n) _ and should ___.

Correct Answer
verified

When an economist says that a country can experience gains from trade, this means it can:

Correct Answer
verified

If we consider the reality that each worker has different skills, then the production possibilities frontier should:

Correct Answer
verified

Correct Answer
verified

When a producer has an absolute advantage at producing a good, it means the producer:

Correct Answer
verified

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Correct Answer
verified

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one avocado is:

Correct Answer
verified

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Correct Answer
verified

Correct Answer
verified

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Correct Answer
verified

Exam 2: Specialization and Exchange

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Correct AnswerverifiedShow Answer

The invisible hand refers to the coordination that occurs from:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a comparative advantage at producing:

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _____ advantage at producing nets, but does not have a(n) _____ advantage at producing fish.

Correct AnswerverifiedShow Answer

If a country has an absolute advantage at producing one good, which of the following is true?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce _____ because it has a(n) _____ and should _____.

Correct AnswerverifiedShow Answer

When an economist says that a country can experience gains from trade, this means it can:

Correct AnswerverifiedShow Answer

If we consider the reality that each worker has different skills, then the production possibilities frontier should:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a producer has an absolute advantage at producing a good, it means the producer:

Correct AnswerverifiedShow Answer

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Correct AnswerverifiedShow Answer

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one avocado is:

Correct AnswerverifiedShow Answer

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose an American worker can make 100 nets or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 nets or catch 400 fish per day. The United States has a(n) _ advantage at producing nets, but does not have a(n) _ advantage at producing fish.

Correct Answer
verified

Correct Answer
verified

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. When trade opens up, the United States should produce ___ because it has a(n) _ and should ___.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified