Question 1

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then _____

Accepted Answer

A)  Robin cannot benefit by trading with Robert and should instead specialize in both gardening and baking. 
B)  Robin can benefit by specializing in gardening if Robert specializes in baking. 
C)  Robin can benefit by specializing in baking if Robert specializes in gardening. 
D)  Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what. 
E)  neither Robin nor Robert can benefit from trading with the other. 
A)  Robin cannot benefit by trading with Robert and should instead specialize in both gardening and baking. 
B)  Robin can benefit by specializing in gardening if Robert specializes in baking. 
C)  Robin can benefit by specializing in baking if Robert specializes in gardening. 
D)  Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what. 
E)  neither Robin nor Robert can benefit from trading with the other.

Question 2

The law of comparative advantage does not apply to _____

Accepted Answer

A)  entire nations. 
B)  natural resources. 
C)  individuals. 
D)  firms. 
E)  the regions of a country. 
A)  entire nations. 
B)  natural resources. 
C)  individuals. 
D)  firms. 
E)  the regions of a country.

Question 3

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Leila's opportunity cost of knitting one sweater is _____

Accepted Answer

A)  equal to 240 cookies. 
B)  equal to 480 cookies. 
C)  equal to 32 cookies. 
D)  equal to 1/32 of a cookie. 
E)  equal to 16 cookies. 
A)  equal to 240 cookies. 
B)  equal to 480 cookies. 
C)  equal to 32 cookies. 
D)  equal to 1/32 of a cookie. 
E)  equal to 16 cookies.

Question 4

Attending summer school costs $2,200. If you worked, you could earn $7,000. What is the opportunity cost of attending summer school?

Accepted Answer

A)  $2,200. 
B)  $7,000. 
C)  $8,000. 
D)  $9,200. 
E)  $10,200. 
A)  $2,200. 
B)  $7,000. 
C)  $8,000. 
D)  $9,200. 
E)  $10,200.

Question 5

Exhibit 2.2
​  
-Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Which of the following points represents an inefficient use of the economy's resources?

Accepted Answer

A)  h 
B)  d 
C)  f 
D)  i 
E)  e 
A)  h 
B)  d 
C)  f 
D)  i 
E)  e

Question 6

Exhibit 2.2
​  
-Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Point f represents _____

Accepted Answer

A)  an efficient combination of Good A and Good B. 
B)  the only efficient combination of Good A and Good B. 
C)  the combination of Good A and Good B that the economy will produce. 
D)  an inefficient combination of Good A and Good B. 
E)  the combination of Good A and Good B that will maximize profits. 
A)  an efficient combination of Good A and Good B. 
B)  the only efficient combination of Good A and Good B. 
C)  the combination of Good A and Good B that the economy will produce. 
D)  an inefficient combination of Good A and Good B. 
E)  the combination of Good A and Good B that will maximize profits.

Question 7

If people specialize in producing those goods for which they possess a comparative advantage, then an economy as a whole can produce a greater quantity of goods.

Accepted Answer

A) True 
 B)False

Question 8

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is correct?

Accepted Answer

A)  The opportunity cost of painting is higher for Helen. 
B)  The opportunity cost of baking cakes is lower for Josh. 
C)  Helen's opportunity cost of painting one room is equal to 1/40 of a cake. 
D)  Josh's opportunity cost of baking one cake is equal to painting 60 rooms. 
E)  The opportunity cost of cakes cannot be computed. 
A)  The opportunity cost of painting is higher for Helen. 
B)  The opportunity cost of baking cakes is lower for Josh. 
C)  Helen's opportunity cost of painting one room is equal to 1/40 of a cake. 
D)  Josh's opportunity cost of baking one cake is equal to painting 60 rooms. 
E)  The opportunity cost of cakes cannot be computed.

Question 9

Money facilitates trade because _____

Accepted Answer

A)  it eliminates the need for specialization. 
B)  it prevents people from taking advantage of each other. 
C)  it serves as a medium of exchange. 
D)  the division of labor allows goods to be produced at a lower cost. 
E)  it is considered less valuable than the goods it is used to buy. 
A)  it eliminates the need for specialization. 
B)  it prevents people from taking advantage of each other. 
C)  it serves as a medium of exchange. 
D)  the division of labor allows goods to be produced at a lower cost. 
E)  it is considered less valuable than the goods it is used to buy.

Question 10

The opportunity cost of going to college consists of more than just the tuition.

Accepted Answer

A) True 
 B)False

Question 11

Comparativeadvantage is measured in terms of _____

Accepted Answer

A)  opportunity costs. 
B)  absolute advantage. 
C)  sunk costs. 
D)  dollar costs. 
E)  trade. 
A)  opportunity costs. 
B)  absolute advantage. 
C)  sunk costs. 
D)  dollar costs. 
E)  trade.

Question 12

Exhibit 2.2
​  
-Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If resources are used fully and efficiently, then the economy can produce at point(s) _____

Accepted Answer

A)  f 
B)  a or b 
C)  c 
D)  d or e 
E)  g, h, or i 
A)  f 
B)  a or b 
C)  c 
D)  d or e 
E)  g, h, or i

Question 13

A person who can produce more of a good than another person is said to possess a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 2.6
  
-Refer to Exhibit 2.6, which shows the production possibilities frontier for food production and education. Which of the following would cause the production possibilities frontier to shift from AA to BA?

Accepted Answer

A)  a drought that affected food production but had no effect on education 
B)  a technological improvement in education that had no effect on food production 
C)  a technological improvement in food production that had no effect on education 
D)  a disease that affected students' ability to learn (and therefore education) but not food production 
E)  an increase in the size of the labor force that affected both food production and education 
A)  a drought that affected food production but had no effect on education 
B)  a technological improvement in education that had no effect on food production 
C)  a technological improvement in food production that had no effect on education 
D)  a disease that affected students' ability to learn (and therefore education) but not food production 
E)  an increase in the size of the labor force that affected both food production and education

Question 15

Each point on a production possibilities frontier requires full employment of resources.

Accepted Answer

A) True 
 B)False

Question 16

Sunk costs _____

Accepted Answer

A)  can only be measured in monetary terms. 
B)  are opportunity costs. 
C)  are marginal costs. 
D)  lower the efficiency of production. 
E)  should not be considered when making economic decisions. 
A)  can only be measured in monetary terms. 
B)  are opportunity costs. 
C)  are marginal costs. 
D)  lower the efficiency of production. 
E)  should not be considered when making economic decisions.

Question 17

Exhibit 2.2
​  
-Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If all of the economy's resources are used efficiently to produce only Good B, then the economy will be at point _____.

Accepted Answer

A)  g 
B)  b 
C)  h 
D)  i 
E)  e 
A)  g 
B)  b 
C)  h 
D)  i 
E)  e

Question 18

Table 2.1
 $$\begin{array}{l}
\text { Table } 2.1\
\begin{array} { | l | l | l | l | l | l | } 
\hline \text { Item } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Movie } & \$ 0 & 10 & 20 & 30 & 40 \
\hline \text { Restaurant } & \$ 40 & 30 & 20 & 10 & 0 \
\hline
\end{array}
\end{array}$$
-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option B?

Accepted Answer

A)  $10 in terms of movies 
B)  $30 in terms of restaurant 
C)  $30 in terms of movies and $10 in terms of restaurant 
D)  $40 because you managed to do both 
E)  $0 because you managed to do both 
A)  $10 in terms of movies 
B)  $30 in terms of restaurant 
C)  $30 in terms of movies and $10 in terms of restaurant 
D)  $40 because you managed to do both 
E)  $0 because you managed to do both

Question 19

Table 2.2
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline \text { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \
\hline \text { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \
\hline
\end{array}$$
-Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of option C?

Accepted Answer

A)  $100 
B)  $25 in terms of C 
C)  $25 in terms in terms of B 
D)  The total value of all the options taken together 
E)  The value of the option given up if C were not chosen 
A)  $100 
B)  $25 in terms of C 
C)  $25 in terms in terms of B 
D)  The total value of all the options taken together 
E)  The value of the option given up if C were not chosen

Question 20

Table 2.1
 $$\begin{array}{l}
\text { Table } 2.1\
\begin{array} { | l | l | l | l | l | l | } 
\hline \text { Item } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Movie } & \$ 0 & 10 & 20 & 30 & 40 \
\hline \text { Restaurant } & \$ 40 & 30 & 20 & 10 & 0 \
\hline
\end{array}
\end{array}$$
-Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. If you decide to spend all your money at the movies, how much can you spend at the restaurant?

Accepted Answer

A)  $40 
B)  $30 
C)  $20 
D)  $10 
E)  $0 
A)  $40 
B)  $30 
C)  $20 
D)  $10 
E)  $0

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then _____

The law of comparative advantage does not apply to _____

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Leila's opportunity cost of knitting one sweater is _____

Attending summer school costs $2,200. If you worked, you could earn $7,000. What is the opportunity cost of attending summer school?

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Which of the following points represents an inefficient use of the economy's resources?

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Point f represents _____

If people specialize in producing those goods for which they possess a comparative advantage, then an economy as a whole can produce a greater quantity of goods.

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is correct?

Money facilitates trade because _____

The opportunity cost of going to college consists of more than just the tuition.

Comparativeadvantage is measured in terms of _____

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If resources are used fully and efficiently, then the economy can produce at point(s) _____

A person who can produce more of a good than another person is said to possess a comparative advantage.

Exhibit 2.6 -Refer to Exhibit 2.6, which shows the production possibilities frontier for food production and education. Which of the following would cause the production possibilities frontier to shift from AA to BA?

Each point on a production possibilities frontier requires full employment of resources.

Sunk costs _____

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If all of the economy's resources are used efficiently to produce only Good B, then the economy will be at point _____.

Table 2.1 Table 2.1 Item A B C D E Movie \ 0 10 20 30 40 Restaurant \ 40 30 20 10 0 -Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option B?

Table 2.2 Option Amount \ 100 \ 50 \ 25 \ 15 \ 0 -Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of option C?

Table 2.1 Table 2.1 Item A B C D E Movie \ 0 10 20 30 40 Restaurant \ 40 30 20 10 0 -Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. If you decide to spend all your money at the movies, how much can you spend at the restaurant?

The Art and Science of Economic Analysis.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 2: Economic Tools and Economic Systems.

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then _____

The law of comparative advantage does not apply to _____

In one week, Sami can knit 5 sweaters or bake 240 cookies. In one week, Leila can knit 15 sweaters or bake 480 cookies. Leila's opportunity cost of knitting one sweater is _____

Attending summer school costs $2,200. If you worked, you could earn $7,000. What is the opportunity cost of attending summer school?

Exhibit 2.2 ​ -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Which of the following points represents an inefficient use of the economy's resources?

Exhibit 2.2 ​ -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Point f represents _____

If people specialize in producing those goods for which they possess a comparative advantage, then an economy as a whole can produce a greater quantity of goods.

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is correct?

Money facilitates trade because _____

The opportunity cost of going to college consists of more than just the tuition.

Comparativeadvantage is measured in terms of _____

Exhibit 2.2 ​ -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If resources are used fully and efficiently, then the economy can produce at point(s) _____

A person who can produce more of a good than another person is said to possess a comparative advantage.

Exhibit 2.6 -Refer to Exhibit 2.6, which shows the production possibilities frontier for food production and education. Which of the following would cause the production possibilities frontier to shift from AA to BA?

Each point on a production possibilities frontier requires full employment of resources.

Sunk costs _____

Exhibit 2.2 ​ -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If all of the economy's resources are used efficiently to produce only Good B, then the economy will be at point _____.

Table 2.1 Table 2.1 Item A B C D E Movie \ 0 10 20 30 40 Restaurant \ 40 30 20 10 0 -Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. What is the opportunity cost of Option B?

Table 2.2 Option Amount \ 100 \ 50 \ 25 \ 15 \ 0 -Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of option C?

Table 2.1 Table 2.1 Item A B C D E Movie \ 0 10 20 30 40 Restaurant \ 40 30 20 10 0 -Refer to Table 2.1. You can spend $40 on going to the movies or eating at a restaurant, or both. If you decide to spend all your money at the movies, how much can you spend at the restaurant?

The Art and Science of Economic Analysis.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Which of the following points represents an inefficient use of the economy's resources?

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. Point f represents _____

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If resources are used fully and efficiently, then the economy can produce at point(s) _____

Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. If all of the economy's resources are used efficiently to produce only Good B, then the economy will be at point _____.