Exam 2: Scarcity and Opportunity Costs

Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage.

Free trade leads to an overall improvement in the standard of living in a country because everything is produced at the lowest possible cost.

A point inside a nation's production possibilities curve can represent:

When constructing a production possibility curve for an economy, which of the following is assumed to be constant?

Given a production possibilities curve for defense goods and non-defense goods, which of the following is not true?

According to economists, human activity is unresponsive to changes in costs.

If the general education level within a country rises significantly over time, it is likely that:

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars.?Figure 2.1 -Refer to Figure 2.1. If the country has curve I as its PPC, then _____ would most likely cause the curve to shift to curve II.

Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bob?

A decrease in the quantity of available resources would be represented by:

Consider a nation with an endowment of iron ore and petroleum. If the nation specializes in the production of aluminum and gasoline instead of steel we can say that it is operating:

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.?Table 2.1 -Refer to Table 2.1. Identify the correct statement.

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.?Table 2.4 -Refer to Table 2.4. If the countries were to engage in trade, what would be the least amount Ohio would accept for 1 cookie?

Consider a PPC with automobiles on the vertical axis and cotton on the horizontal axis. The discovery of a new fertilizer that improves crop yield will shift:

The concept of comparative advantage applies:

Opportunity cost is best defined as:

In economics, the concept of opportunity cost is:

Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. When these two individuals engage in trade, it would be advantageous for both if:

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars.?Figure 2.1 -Refer to Figure 2.1. If the country's PPC curve is curve II, then:

Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?