Question 1

If a country produces only two goods, it is possible to have a comparative advantage in the production of both those goods.

Accepted Answer

A) True 
 B)False

Question 2

Table 2-8
   
Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea.
-Refer to Table 2-8.What is China's opportunity cost of producing one digital camera?

Accepted Answer

A) 0.04 pounds of wheat 
B) 4 pounds of wheat 
C) 25 pounds of wheat 
D) 40 pounds of wheat 
A) 0.04 pounds of wheat 
B) 4 pounds of wheat 
C) 25 pounds of wheat 
D) 40 pounds of wheat

Question 3

Table 2-11
   
Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-11.What is Scotland's opportunity cost of producing one motorcycle?

Accepted Answer

A) 0.25 guitar 
B) 4 guitars 
C) 12 guitars 
D) 16 guitars 
A) 0.25 guitar 
B) 4 guitars 
C) 12 guitars 
D) 16 guitars

Question 4

Table 2-2
Production choices for Billie's Bedroom Shop
  
-Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

Accepted Answer

A) along Billie's production possibilities frontier. 
B) inside Billie's production possibilities frontier. 
C) outside Billie's production possibilities frontier. 
D) at the vertical intercept of Billie's production possibilities frontier. 
A) along Billie's production possibilities frontier. 
B) inside Billie's production possibilities frontier. 
C) outside Billie's production possibilities frontier. 
D) at the vertical intercept of Billie's production possibilities frontier.

Question 5

Table 2-8
   
Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea.
-Refer to Table 2-8.What is South Korea's opportunity cost of producing one pound of wheat?

Accepted Answer

A) 60 digital cameras 
B) 20 digital cameras 
C) 5 digital cameras 
D) 0.05 units of a digital camera 
A) 60 digital cameras 
B) 20 digital cameras 
C) 5 digital cameras 
D) 0.05 units of a digital camera

Question 6

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 7

In economics, the term "free market" refers to a market where products are traded but not sold.

Accepted Answer

A) True 
 B)False

Question 8

Crude oil is not an example of a factor of production, but when crude oil is processed into gasoline, it is a factor of production.

Accepted Answer

A) True 
 B)False

Question 9

If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.

Accepted Answer

A) True 
 B)False

Question 10

The concept of opportunity cost is that

Accepted Answer

A) in a market economy, taking advantage of profitable opportunities involves some money cost. 
B) the economic cost of using a factor of production is the alternative use of that factor that is given up. 
C) taking advantage of investment opportunities involves costs. 
D) the cost of production varies depending on the opportunity for technological application. 
A) in a market economy, taking advantage of profitable opportunities involves some money cost. 
B) the economic cost of using a factor of production is the alternative use of that factor that is given up. 
C) taking advantage of investment opportunities involves costs. 
D) the cost of production varies depending on the opportunity for technological application.

Question 11

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except

Accepted Answer

A) more software companies will choose to export their products to that country. 
B) more film makers will choose to do business in that country. 
C) the black market for intellectual property will become more prosperous in that country. 
D) foreign investment in that country will increase. 
A) more software companies will choose to export their products to that country. 
B) more film makers will choose to do business in that country. 
C) the black market for intellectual property will become more prosperous in that country. 
D) foreign investment in that country will increase.

Question 12

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?

Accepted Answer

Yes, a firm can have an absolute advanta

Question 13

If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the

Accepted Answer

A) output market. 
B) product market. 
C) factor market. 
D) dairy products market. 
A) output market. 
B) product market. 
C) factor market. 
D) dairy products market.

Question 14

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew are a factor of production.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-9
   
Figure 2-9 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews.
-Refer to Figure 2-9.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Accepted Answer

A) 3/8 of a pound of cashews 
B) 5/8 of a pound of cashews 
C) 2 2/3 pounds of cashews 
D) 120 pounds of cashews 
A) 3/8 of a pound of cashews 
B) 5/8 of a pound of cashews 
C) 2 2/3 pounds of cashews 
D) 120 pounds of cashews

Question 16

Table 2-9
   
Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras.
-Refer to Table 2-9.Guatemala has a comparative advantage in the production of

Accepted Answer

A) canoes. 
B) sailboats. 
C) both products. 
D) neither product. 
A) canoes. 
B) sailboats. 
C) both products. 
D) neither product.

Question 17

What is meant by the term "opportunity cost"?

Accepted Answer

Opportunity cost is

Question 18

All of the following are examples of spending on factors of production in the circular flow model except

Accepted Answer

A) Bima hires two students to work at his ice-cream store. 
B) "Get Fit Together" purchases 3 new treadmills for its gym. 
C) Iris buys a dozen roses for her mother's birthday. 
D) The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities. 
A) Bima hires two students to work at his ice-cream store. 
B) "Get Fit Together" purchases 3 new treadmills for its gym. 
C) Iris buys a dozen roses for her mother's birthday. 
D) The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

Question 19

Figure 2-8
   
Figure 2-8 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2-8.Suppose Vidalia is currently producing 60 dozen orchids per period.How many roses is it also producing, assuming that resources are fully utilized?

Accepted Answer

A) 40 dozen roses 
B) 50 dozen roses 
C) 60 dozen roses 
D) 100 dozen roses 
A) 40 dozen roses 
B) 50 dozen roses 
C) 60 dozen roses 
D) 100 dozen roses

Question 20

A production possibilities frontier with a bowed-outward shape indicates

Accepted Answer

A) the possibility of inefficient production. 
B) constant opportunity costs as more and more of one good is produced. 
C) increasing opportunity costs as more and more of one good is produced. 
D) decreasing opportunity costs as more and more of one good is produced. 
A) the possibility of inefficient production. 
B) constant opportunity costs as more and more of one good is produced. 
C) increasing opportunity costs as more and more of one good is produced. 
D) decreasing opportunity costs as more and more of one good is produced.

If a country produces only two goods, it is possible to have a comparative advantage in the production of both those goods.

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-8.What is China's opportunity cost of producing one digital camera?

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.What is Scotland's opportunity cost of producing one motorcycle?

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-8.What is South Korea's opportunity cost of producing one pound of wheat?

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

In economics, the term "free market" refers to a market where products are traded but not sold.

Crude oil is not an example of a factor of production, but when crude oil is processed into gasoline, it is a factor of production.

If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.

The concept of opportunity cost is that

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?

If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew are a factor of production.

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-9.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Table 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.Guatemala has a comparative advantage in the production of

What is meant by the term "opportunity cost"?

All of the following are examples of spending on factors of production in the circular flow model except

A production possibilities frontier with a bowed-outward shape indicates

Economics: Foundations and Models

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 2: Trade-Offs, Comparative Advantage, and the Market System

If a country produces only two goods, it is possible to have a comparative advantage in the production of both those goods.

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-8.What is China's opportunity cost of producing one digital camera?

Table 2-11 Table 2-11 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-11.What is Scotland's opportunity cost of producing one motorcycle?

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. -Refer to Table 2-8.What is South Korea's opportunity cost of producing one pound of wheat?

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

In economics, the term "free market" refers to a market where products are traded but not sold.

Crude oil is not an example of a factor of production, but when crude oil is processed into gasoline, it is a factor of production.

If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns.

The concept of opportunity cost is that

If a nation changes its laws to more actively enforce intellectual property rights, all of the following will most likely take place except

Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?

If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the

A bed of oysters is not an example of a factor of production but the shucked oysters used to make oyster stew are a factor of production.

Figure 2-9 Figure 2-9 shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. -Refer to Figure 2-9.What is the opportunity cost of producing 1 bolt of cotton in Indonesia?

Table 2-9 Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in Guatemala and Honduras. -Refer to Table 2-9.Guatemala has a comparative advantage in the production of

What is meant by the term "opportunity cost"?

All of the following are examples of spending on factors of production in the circular flow model except

A production possibilities frontier with a bowed-outward shape indicates

Economics: Foundations and Models

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters