Question 1

When nations trade,it:

Accepted Answer

A)   only benefits the stronger nation.
B)   only benefits the weaker nation.
C)   can benefit all nations involved.
D)   can only benefit one nation, but we cannot say which nation without more information.E) A) and C)
F) C) and D)

Question 2

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.If Jerry decides to specialize in building fences,what are the limits to his terms of trade?

Accepted Answer

A)   Jerry will accept no less than 7 dishes for each fence.
B)   Jerry will accept no less than 2 dishes for each fence.
C)   Jerry will accept no less than 7 fences for each dishes.
D)   Jerry will accept no less than 2 fences for each dishes.E) A) and B)
F) All of the above

Question 3

If a wealthy nation such as the United States trades with a poorer,less developed nation like Cambodia,then it is likely true that:

Accepted Answer

A)   the United States is taking advantage of Cambodia and is the only beneficiary to the trade.
B)   Cambodia is pressured to enter trade and not benefiting at all.
C)   both the United States and Cambodia can benefit from trading.
D)   the United States is being charitable and not benefiting from the trade at all.E) B) and C)
F) C) and D)

Question 4

A production possibilities frontier is a line or curve that:

Accepted Answer

A)   shows all the possible combinations of outputs that can be produced using all available resources.
B)   shows what can be produced when all available resources are efficiently used.
C)   shows the best combinations of outputs that can be produced using all available resources.
D)   explains why societies make the choices they do.E) A) and B)
F) B) and C)

Question 5

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.After looking at the production possibilities for both Tom and Jerry,we can surmise that:

Accepted Answer

A)   Tom has the absolute advantage in the production of both dishes and fences.
B)   Jerry has the absolute advantage in the production of both dishes and fences.
C)   Tom has the absolute advantage in the production of dishes and Jerry has the absolute advantage in fence production.
D)   Tom has the absolute advantage in the production of fences and Jerry has the absolute advantage in dish production.E) A) and B)
F) A) and C)

Question 6

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world.The likely outcome of this action will be that the country's citizens will be:

Accepted Answer

A)   forced to consume less than before if they possessed a comparative advantage in the production of a good.
B)   better off than before if they possess an absolute advantage in the production of a good.
C)   better off than before only if they have the absolute advantage in the production of most goods they consume.
D)   better off than before only if they have the comparative advantage in all goodsE) A) and B)
F) B) and C)

Question 7

If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then Spain should:

Accepted Answer

A)   produce the good it has an absolute advantage in producing.
B)   produce the good it has a comparative advantage in producing.
C)   remain self-sufficient if it can produce both efficiently.
D)   trade only if it possesses the absolute advantage in the production of both goods.E) B) and D)
F) All of the above

Question 8

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? The United States has an absolute advantage:

Accepted Answer

A)   and a comparative advantage in the production of shoes.
B)   and a comparative advantage in the production of apples.
C)   in the production of both goods and a comparative advantage in the production of neither good.
D)   in the production of both goods and a comparative advantage in the production of both goods.E) None of the above
F) B) and D)

Question 9

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 for Canada is:

Accepted Answer

A)   2 apples for each pair of shoes.
B)   2 pairs of shoes for each apple.
C)   ½ apple for each pair of shoes.
D)   ½ pair of shoes for every 2 apples.E) C) and D)
F) A) and B)

Question 10

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.Using the concepts of advantage and trade,we can say that the opportunity cost of one pair of gloves is:

Accepted Answer

A)   lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production.
B)   higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production.
C)   the same for both the United States and Bangladesh, therefore no comparative advantage exists.
D)   the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.E) A) and B)
F) C) and D)

Question 11

The concepts of comparative advantage,specialization,and trade:

Accepted Answer

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

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? Bangladesh should:

Accepted Answer

A)   specialize in glove production since it possesses the comparative advantage in glove production.
B)   despecialize in radish production since it possesses the comparative advantage in radish production.
C)   produce both gloves and radishes since it has the absolute advantage in glove production.
D)   only produce radishes since it has the absolute advantage in radish production.E) A) and B)
F) A) and C)

Question 13

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country B could potentially make would be:

Accepted Answer

A)   (400 iPods, 2,000 tablets) .
B)   (200 iPods, 1,500 tablets) .
C)   (300 iPods, 450 tablets) .
D)   (400 iPods, 1 tablet) .E) B) and D)
F) None of the above

Question 14

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.The workers in Country A should specialize in __________________ because they possess the ___________________ in the production of that good.

Accepted Answer

A)   bananas; comparative advantage
B)   tomatoes; comparative advantage
C)   bananas; absolute advantage
D)   tomatoes; absolute advantageE) None of the above
F) C) and D)

Question 15

People would not choose to specialize because:

Accepted Answer

A)   it can lead to more consumption than being self-sufficient.
B)   it can lead to consumption beyond the production possibilities frontier.
C)   it allows people to acquire goods at a lower opportunity cost.
D)   production standards are harder to control if goods are imported from other countries.E) None of the above
F) B) and D)

Question 16

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country A could not make would be:

Accepted Answer

A)   (500 iPods, 150 tablets) .
B)   (500 iPods, 200 tablets) .
C)   (500 iPods, 250 tablets) .
D)   (500 iPods, 300 tablets) .E) B) and C)
F) A) and B)

Question 17

The production possibilities frontier:

Accepted Answer

A)   can show all possible combinations of goods but not tell us which combination society should choose.
B)   can show the best combination of goods which society should choose.
C)   cannot show all possible combinations of goods because society is typically inefficient.
D)   can show us which possible combinations of goods society should choose, but cannot tell us which points will be inefficient.E) A) and B)
F) A) and C)

Question 18

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country A,the trade-off of making one tomato is:

Accepted Answer

A)   2 bananas.
B)   3 bananas.
C)   4 bananas.
D)   5 bananas.E) B) and D)
F) A) and C)

Question 19

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After comparing each country's production possibilities curve,it is clear that:

Accepted Answer

A)  Country A should specialize in cars and Country B should specialize in trucks,and both could benefit from trade.
B)  Country A should specialize in trucks and Country B should specialize in cars,and both will benefit from trade.
C)  Country A will not benefit from trade.
D)  Country B will lose by trading with Country A.E) All of the above
F) A) and B)

Question 20

Suppose the figure shown represents the production possibilities frontier for Country A.Country B offers to trade four trucks for every airplane.Assuming Country A specializes in airplane production,which of the following combinations of goods could Country A consume?

Accepted Answer

A)  (15 airplanes,20 trucks) 
B)  (10 airplanes,20 trucks) 
C)  (10 airplanes,30 trucks) 
D)  (5 airplanes,20 trucks) E) A) and D)
F) B) and C)

Exam 2: Specialization and Exchange

Correct Answer
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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? Bangladesh should:

Correct Answer
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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 for Canada is:

Correct Answer
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If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then Spain should:

Correct Answer
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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country B could potentially make would be:

Correct Answer
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Correct Answer
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A production possibilities frontier is a line or curve that:

Correct Answer
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A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world.The likely outcome of this action will be that the country's citizens will be:

Correct Answer
verified

Correct Answer
verified

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country A could not make would be:

Correct Answer
verified

People would not choose to specialize because:

Correct Answer
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The concepts of comparative advantage,specialization,and trade:

Correct Answer
verified

When nations trade,it:

Correct Answer
verified

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.Using the concepts of advantage and trade,we can say that the opportunity cost of one pair of gloves is:

Correct Answer
verified

If a wealthy nation such as the United States trades with a poorer,less developed nation like Cambodia,then it is likely true that:

Correct Answer
verified

The production possibilities frontier:

Correct Answer
verified

Suppose the figure shown represents the production possibilities frontier for Country A.Country B offers to trade four trucks for every airplane.Assuming Country A specializes in airplane production,which of the following combinations of goods could Country A consume?

Correct Answer
verified

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After comparing each country's production possibilities curve,it is clear that:

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? The United States has an absolute advantage:

Correct Answer
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country A,the trade-off of making one tomato is:

Correct Answer
verified

Exam 2: Specialization and Exchange

Correct AnswerverifiedShow Answer

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? Bangladesh should:

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.The opportunity cost for Canada is:

Correct AnswerverifiedShow Answer

If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then Spain should:

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country B could potentially make would be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A production possibilities frontier is a line or curve that:

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.The likely outcome of this action will be that the country's citizens will be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country A could not make would be:

Correct AnswerverifiedShow Answer

People would not choose to specialize because:

Correct AnswerverifiedShow Answer

The concepts of comparative advantage,specialization,and trade:

Correct AnswerverifiedShow Answer

When nations trade,it:

Correct AnswerverifiedShow Answer

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.Using the concepts of advantage and trade,we can say that the opportunity cost of one pair of gloves is:

Correct AnswerverifiedShow Answer

If a wealthy nation such as the United States trades with a poorer,less developed nation like Cambodia,then it is likely true that:

Correct AnswerverifiedShow Answer

The production possibilities frontier:

Correct AnswerverifiedShow Answer

Suppose the figure shown represents the production possibilities frontier for Country A.Country B offers to trade four trucks for every airplane.Assuming Country A specializes in airplane production,which of the following combinations of goods could Country A consume?

Correct AnswerverifiedShow Answer

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.After comparing each country's production possibilities curve,it is clear that:

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? The United States has an absolute advantage:

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country A,the trade-off of making one tomato is:

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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