Question 1

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Accepted Answer

A) True 
 B)False

Question 2

Table 3-7
Barb and Ren run a business that sets up and tests computers. Assume that Barb and Ren can switch between setting up and testing computers at a constant rate. The following table applies.
​
​
  
-Refer to Table 3-7. The number of minutes needed by Barb to test a computer is

Accepted Answer

A) 36. 
B) 48. 
C) 30. 
D) 64. 
A) 36. 
B) 48. 
C) 30. 
D) 64.

Question 3

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

Accepted Answer

A) True 
 B)False

Question 4

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Accepted Answer

No, their opportunit

Question 5

Figure 3-4
    
-Refer to Figure 3-4. If Betty produces only pizzas, she can produce

Accepted Answer

A) 150 pies per day. 
B) -300 pies per day. 
C) 300 pies per day. 
D) 450 pies per day. 
A) 150 pies per day. 
B) -300 pies per day. 
C) 300 pies per day. 
D) 450 pies per day.

Question 6

For both parties to gain from trade, the price at which they trade must lie between the two opportunity costs.

Accepted Answer

A) True 
 B)False

Question 7

Figure 3-3
    
-Refer to Figure 3-3. If Tanek and Kalene both spend all of their time producing burritos, then total production is

Accepted Answer

A) 0 tacos and 400 burritos. 
B) 400 tacos and 250 burritos. 
C) 0 tacos and 500 burritos. 
D) 800 tacos and 500 burritos. 
A) 0 tacos and 400 burritos. 
B) 400 tacos and 250 burritos. 
C) 0 tacos and 500 burritos. 
D) 800 tacos and 500 burritos.

Question 8

Economists use the term ______ to refer to the ability to produce a good using fewer inputs than another producer.

Accepted Answer

The answer of Economists use the term ______ to refer...

Question 9

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Accepted Answer

A) Iowa has a comparative advantage in the production of corn. 
B) Iowa has an absolute advantage in the production of corn. 
C) Iowa should import corn from Oklahoma. 
D) Oklahoma should produce just enough corn to satisfy its own residents' demands. 
A) Iowa has a comparative advantage in the production of corn. 
B) Iowa has an absolute advantage in the production of corn. 
C) Iowa should import corn from Oklahoma. 
D) Oklahoma should produce just enough corn to satisfy its own residents' demands.

Question 10

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods.

Accepted Answer

A) True 
 B)False

Question 11

Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week. Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week. Zora has the comparative advantage in quilts and the absolute advantage in neither good, while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 3-1
​
In country A a worker who works 40 hours can produce 200 pounds of rice or 100 pounds of broccoli. In country B a worker who works 40 hours can produce 160 pounds of rice or 120 pounds of broccoli.
-Refer to Scenario 3-1. Which country, if either, has a comparative advantage producing rice? Defend your answer using the numbers given.

Accepted Answer

Country A has a comparative ad

Question 13

If one producer has the absolute advantage in the production of all goods, then that same producer will have the comparative advantage in the production of all goods as well.

Accepted Answer

A) True 
 B)False

Question 14

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Accepted Answer

Frank has the comparative adva

Question 15

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 16

Figure 3-7
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier     ​
-Refer to Figure 3-7. What is Kate's opportunity cost of one muffin?

Accepted Answer

The answer of Figure 3-7
Mary's Production Possibilities Frontier Kate's Production...

Question 17

Figure 3-2
  
-Refer to Figure 3-2. If the production possibilities frontier shown is for 48 hours of production, then how long does it take Venezuela to make one pound of cashews?

Accepted Answer

A)  $$\frac { 1 } { 5 }$$ hour 
B)  $$\frac { 1 } { 3 }$$ hour 
C) 3 hours 
D) 5 hours 
A)  $$\frac { 1 } { 5 }$$ hour 
B)  $$\frac { 1 } { 3 }$$ hour 
C) 3 hours 
D) 5 hours

Question 18

Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that

Accepted Answer

A) in order to consume beyond its PPF, the United States should produce more pork than what it requires and export some of it to Mexico. 
B) in order to consume beyond its PPF, the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico. 
C) in order to consume beyond its PPF, the United States should refrain altogether from producing pork and import all of what it requires from Mexico. 
D) Mexico has nothing to gain from importing United States pork. 
A) in order to consume beyond its PPF, the United States should produce more pork than what it requires and export some of it to Mexico. 
B) in order to consume beyond its PPF, the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico. 
C) in order to consume beyond its PPF, the United States should refrain altogether from producing pork and import all of what it requires from Mexico. 
D) Mexico has nothing to gain from importing United States pork.

Question 19

Figure 3-7
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier     ​
-Refer to Figure 3-7. Who has a comparative advantage in making cookies?

Accepted Answer

The answer of Figure 3-7
Mary's Production Possibilities Frontier Kate's Production...

Question 20

Both Jarek and Kalene produce hair scarves and necklaces. However, Kalene is better at producing both goods. In this case, trade could

Accepted Answer

A) benefit both Kalene and Jarek. 
B) benefit Kalene, but not Jarek. 
C) benefit Jarek, but not Kalene. 
D) benefit neither Kalene nor Jarek. 
A) benefit both Kalene and Jarek. 
B) benefit Kalene, but not Jarek. 
C) benefit Jarek, but not Kalene. 
D) benefit neither Kalene nor Jarek.

Exam 3: Interdependence and the Gains From Trade

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Table 3-7 Barb and Ren run a business that sets up and tests computers. Assume that Barb and Ren can switch between setting up and testing computers at a constant rate. The following table applies. ​ ​ -Refer to Table 3-7. The number of minutes needed by Barb to test a computer is

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Figure 3-4 -Refer to Figure 3-4. If Betty produces only pizzas, she can produce

For both parties to gain from trade, the price at which they trade must lie between the two opportunity costs.

Figure 3-3 -Refer to Figure 3-3. If Tanek and Kalene both spend all of their time producing burritos, then total production is

Economists use the term ______ to refer to the ability to produce a good using fewer inputs than another producer.

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods.

If one producer has the absolute advantage in the production of all goods, then that same producer will have the comparative advantage in the production of all goods as well.

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

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.

Figure 3-7 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier ​ -Refer to Figure 3-7. What is Kate's opportunity cost of one muffin?

Figure 3-2 -Refer to Figure 3-2. If the production possibilities frontier shown is for 48 hours of production, then how long does it take Venezuela to make one pound of cashews?

Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that

Figure 3-7 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier ​ -Refer to Figure 3-7. Who has a comparative advantage in making cookies?

Both Jarek and Kalene produce hair scarves and necklaces. However, Kalene is better at producing both goods. In this case, trade could

Ten Principles of Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Table 3-7 Barb and Ren run a business that sets up and tests computers. Assume that Barb and Ren can switch between setting up and testing computers at a constant rate. The following table applies. -Refer to Table 3-7. The number of minutes needed by Barb to test a computer is

Figure 3-7 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-7. What is Kate's opportunity cost of one muffin?

Figure 3-7 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-7. Who has a comparative advantage in making cookies?