Question 1

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

Accepted Answer

A)  Phyllis has a comparative advantage in producing bread.
B)  John has a comparative advantage in producing cakes.
C)  Phyllis has an absolute advantage in both goods.
D)  John has an absolute advantage in both goods.
E)  Phyllis has a comparative advantage in producing both cakes and bread.F) D) and E)
G) C) and D)

Question 2

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

Accepted Answer

A)  15 thousand bottles of wine
B)  6 thousand bottles of wine
C)  9 thousand bottles of wine
D)  12 tons of rice
E)  Nothing,it is a free lunch.F) None of the above
G) B) and C)

Question 3

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

Accepted Answer

A)  more jeans are produced.
B)  the country eventually chooses an unattainable point.
C)  free lunches occur.
D)  more tradeoffs occur.
E)  more shoes are produced.F) None of the above
G) A) and B)

Question 4

-In the table above,how many jackets must Mary forgo for every dress she makes?

Accepted Answer

A)  12 jackets
B)  3/4 of a jacket
C)  2/3 of a jacket
D)  1 1/2 jackets
E)  8 jacketsF) All of the above
G) None of the above

Question 5

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Accepted Answer

The United States might have an absolute...

Question 6

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

Accepted Answer

The assertion is incorrect.The statement...

Question 7

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Accepted Answer

A)  resources are being used efficiently.
B)  technology associated with producing SUVs and compact cars is advancing.
C)  resources are not being used efficiently and/or are unemployed.
D)  production of SUVs and compact cars is maximized.
E)  None of the above answers is correct because it is not possible to produce at point D.F) C) and D)
G) A) and D)

Question 8

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

Accepted Answer

A)  shift outward along the horizontal axis farther than the new PPF shown in the figure.
B)  shift outward along the horizontal axis,but not as far as the new PPF shown in the figure.
C)  shift outward along the vertical axis,not along the horizontal axis.
D)  shift inward along the horizontal axis.
E)  shift inward along the vertical axis.F) None of the above
G) A) and B)

Question 9

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

Accepted Answer

A)  0
B)  few
C)  most
D)  all
E)  It is impossible to tell without more information about the prices of airplanes and cruise ships.F) C) and D)
G) A) and B)

Question 10

Points on the PPF are all

Accepted Answer

A)  unattainable and have fully employed resources.
B)  free lunches.
C)  inefficient.
D)  attainable and have some unemployed resources.
E)  production efficient.F) A) and B)
G) A) and C)

Question 11

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

Accepted Answer

A)  Rika
B)  Jeff
C)  neither
D)  both
E)  More information is needed about their production possibilities frontiers to determine who should specialize in jackets.F) B) and E)
G) All of the above

Question 12

Moving from one point to another on a production possibilities frontier implies

Accepted Answer

A)  increasing the production of both goods.
B)  decreasing the production of both goods.
C)  increasing the production of one good and decreasing the production of another.
D)  holding the production levels of both goods constant.
E)  changing the amount of factors of production that are employed.F) C) and E)
G) A) and B)

Question 13

Specialization and trade

Accepted Answer

A)  does not benefit anyone.
B)  allows nations to produce inside their individual production possibilities frontier.
C)  allows nations to consume combinations of products that are outside their individual production possibilities frontier.
D)  shifts the production possibilities frontier inward.
E)  shifts the production possibilities frontier outward.F) B) and C)
G) B) and D)

Question 14

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Accepted Answer

A)  1/2 of a pizza.
B)  1 pizza.
C)  2 pizzas.
D)  20 pizzas.
E)  2 tacos.F) A) and E)
G) A) and D)

Question 15

By specializing and trading,a country is able to

Accepted Answer

A)  obtain the absolute advantage in the goods it produces.
B)  consume but not to produce combinations of goods that lie beyond its production possibilities frontier.
C)  produce but not to consume combinations of goods that lie beyond its production possibilities frontier.
D)  both produce and consume combinations of goods that lie beyond its production possibilities frontier.
E)  neither produce nor consume combinations of goods that lie beyond its production possibilities frontier.F) B) and D)
G) C) and E)

Question 16

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

Accepted Answer

In general,the opportunity cost of incre...

Question 17

-Robinson Crusoe divides his time between catching fish and gathering fruit.Part of his production possibilities frontier is given in the above table.Mr.Crusoe,while lonesome,is efficient and always stays on his PPF.Mr.Crusoe is consuming 20 pounds of fish.Then he decides to slowly become a vegetarian and decrease his consumption of fish to 9 pounds.This decision means that Mr.Crusoe will

Accepted Answer

A)  incur an opportunity cost of 9 pounds of fruit.
B)  incur an opportunity cost of 20 pounds of fish.
C)  be able to enjoy a gain of 9 pounds of fruit.
D)  incur an opportunity cost of 99 pounds of fruit.
E)  incur an opportunity cost of 9 pounds of fish.F) B) and D)
G) C) and D)

Question 18

To achieve gains from trade,a country

Accepted Answer

A)  needs to have an absolute advantage in the production of all goods.
B)  specializes in the producing a good in which it has a lower opportunity cost.
C)  must produce at a point beyond its PPF.
D)  should produce at the midpoint of its PPF.
E)  needs to have an absolute advantage in the production of at least one good.F) A) and B)
G) B) and C)

Question 19

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

Accepted Answer

A)  2 pounds of bananas
B)  100 pounds of bananas
C)  2 pounds of apples
D)  0.5 of a pound of bananas
E)  5/12 of a pound of bananasF) A) and D)
G) B) and E)

Question 20

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Accepted Answer

A)  Deb has a comparative advantage in assembling packets.
B)  Pete has an absolute advantage in both assembling packets and stuffing envelopes.
C)  Deb has a comparative advantage in stuffing envelopes.
D)  Deb has an absolute advantage in both assembling packets and stuffing envelopes.
E)  Deb has a comparative advantage in both assembling packets and stuffing envelopes.F) A) and B)
G) C) and D)

Exam 3: The Economic Problem

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

Correct Answer
verified

Moving from one point to another on a production possibilities frontier implies

Correct Answer
verified

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

Correct Answer
verified

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Correct Answer
verified

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

Correct Answer
verified

Specialization and trade

Correct Answer
verified

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Correct Answer
verified
The United States might have an absolute...
View Answer

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

Correct Answer
verified

Correct Answer
verified

By specializing and trading,a country is able to

Correct Answer
verified

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Correct Answer
verified

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

Correct Answer
verified

Points on the PPF are all

Correct Answer
verified

To achieve gains from trade,a country

Correct Answer
verified

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

Correct Answer
verified

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

Correct Answer
verified

-In the table above,how many jackets must Mary forgo for every dress she makes?

Correct Answer
verified

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

Correct Answer
verified
The assertion is incorrect.The statement...
View Answer

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Correct Answer
verified

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

Correct Answer
verified
In general,the opportunity cost of incre...
View Answer

Exam 3: The Economic Problem

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

Correct AnswerverifiedShow Answer

Moving from one point to another on a production possibilities frontier implies

Correct AnswerverifiedShow Answer

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

Correct AnswerverifiedShow Answer

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Correct AnswerverifiedShow Answer

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

Correct AnswerverifiedShow Answer

Specialization and trade

Correct AnswerverifiedShow Answer

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Correct AnswerverifiedThe United States might have an absolute...View AnswerShow Answer

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

By specializing and trading,a country is able to

Correct AnswerverifiedShow Answer

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

Correct AnswerverifiedShow Answer

Points on the PPF are all

Correct AnswerverifiedShow Answer

To achieve gains from trade,a country

Correct AnswerverifiedShow Answer

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

Correct AnswerverifiedShow Answer

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

Correct AnswerverifiedShow Answer

-In the table above,how many jackets must Mary forgo for every dress she makes?

Correct AnswerverifiedShow Answer

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

Correct AnswerverifiedThe assertion is incorrect.The statement...View AnswerShow Answer

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Correct AnswerverifiedShow Answer

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

Correct AnswerverifiedIn general,the opportunity cost of incre...View AnswerShow Answer

Correct Answer
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verified
The United States might have an absolute...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The assertion is incorrect.The statement...
View Answer

Correct Answer
verified

Correct Answer
verified
In general,the opportunity cost of incre...
View Answer