Question 1

Refer to the accompanying table. According to the table, Pat has the absolute advantage in: $\begin{array}{|l|r|r|}
\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \
\hline \text { Corey } & 12 & 6 \
\hline \text { Pat } & 10 & 15 \
\hline
\end{array}$

Accepted Answer

A) making pizza. 
B) neither making nor delivering pizza. 
C) delivering pizza. 
D) making and delivering pizza. 
A) making pizza. 
B) neither making nor delivering pizza. 
C) delivering pizza. 
D) making and delivering pizza.

Question 2

One reason there is political opposition to international trade is that:

Accepted Answer

A) the potential gains from specialization and trade are small. 
B) trade does not increase the total value of goods and services produced by a nation. 
C) the differences in opportunity costs between countries are small. 
D) not everyone benefits from trade. 
A) the potential gains from specialization and trade are small. 
B) trade does not increase the total value of goods and services produced by a nation. 
C) the differences in opportunity costs between countries are small. 
D) not everyone benefits from trade.

Question 3

If a given production combination is efficient, then it must be:

Accepted Answer

A) above the production possibilities curve. 
B) on the production possibilities curve. 
C) either an attainable or unattainable point. 
D) below the production possibilities curve. 
A) above the production possibilities curve. 
B) on the production possibilities curve. 
C) either an attainable or unattainable point. 
D) below the production possibilities curve.

Question 4

Working efficiently, Jordan can write 3 essays and outline 4 chapters each week. It must be true that:

Accepted Answer

A) 6 essays and 0 chapter outlines would be unattainable. 
B) 2 essays and 3 chapter outlines would be efficient. 
C) 3 essays and 5 chapter outlines would be unattainable. 
D) 4 essays and 3 chapter outlines would be both attainable and efficient. 
A) 6 essays and 0 chapter outlines would be unattainable. 
B) 2 essays and 3 chapter outlines would be efficient. 
C) 3 essays and 5 chapter outlines would be unattainable. 
D) 4 essays and 3 chapter outlines would be both attainable and efficient.

Question 5

If a nation can produce a more computers per year than any other nation, that nation has a(n)________ advantage in the production of computers.

Accepted Answer

A) comparative 
B) absolute 
C) relative 
D) natural 
A) comparative 
B) absolute 
C) relative 
D) natural

Question 6

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. $$\begin{array} { | l | r | r | } 
\hline & \text { Calculatars Per Haur } & \text { Camputers Per Haur } \
\hline \text { Brith } & 100 & 10 \
\hline \text { Jones } & 120 & 6 \
\hline
\end{array}$$  
If Smith and Jones are dividing their time efficiently and producing more than 10 computers and fewer than 120 calculators per hour, then Smith will ________ and Jones will ________.

Accepted Answer

A) produce only computers; produce only calculators 
B) produce only computers; split his time between computers and calculators 
C) split his time between computers and calculators; produce only computers 
D) produce only calculators; produce only computers 
A) produce only computers; produce only calculators 
B) produce only computers; split his time between computers and calculators 
C) split his time between computers and calculators; produce only computers 
D) produce only calculators; produce only computers

Question 7

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.    
Point Y is ________, and point V is ________.

Accepted Answer

A) efficient; inefficient 
B) inefficient; efficient 
C) efficient; efficient 
D) inefficient; inefficient 
A) efficient; inefficient 
B) inefficient; efficient 
C) efficient; efficient 
D) inefficient; inefficient

Question 8

Refer to the accompanying figure. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:

Accepted Answer

A) 800 warheads. 
B) 400 warheads. 
C) 200 warheads. 
D) 100 warheads. 
A) 800 warheads. 
B) 400 warheads. 
C) 200 warheads. 
D) 100 warheads.

Question 9

Refer to the accompanying figure. Moving from point B to point A, the opportunity cost of 25 more salads is:

Accepted Answer

A) 5 pizzas. 
B) 10 pizzas. 
C) 15 pizzas. 
D) 20 pizzas. 
A) 5 pizzas. 
B) 10 pizzas. 
C) 15 pizzas. 
D) 20 pizzas.

Question 10

When a nation reduces the barriers to international trade:

Accepted Answer

A) each individual citizen becomes better off. 
B) each individual citizen becomes worse off. 
C) the total value of all goods and services produced by the nation falls. 
D) the total value of all goods and serviced produced by the nation rises. 
A) each individual citizen becomes better off. 
B) each individual citizen becomes worse off. 
C) the total value of all goods and services produced by the nation falls. 
D) the total value of all goods and serviced produced by the nation rises.

Question 11

If a nation has the lowest opportunity cost of producing a good, that nation has a(n)________ in the production of that good.

Accepted Answer

A) comparative advantage 
B) absolute advantage 
C) comparative advantage and an absolute advantage 
D) absolute advantage and possibly a comparative advantage 
A) comparative advantage 
B) absolute advantage 
C) comparative advantage and an absolute advantage 
D) absolute advantage and possibly a comparative advantage

Question 12

The accompanying figure shows the production possibilities curve for the island of Genovia:    
The opportunity cost of producing one ton of agricultural products in Genovia is:

Accepted Answer

A) 1,000 cars. 
B) 1 car. 
C) 1/5 of a car. 
D) 1/50 of a car. 
A) 1,000 cars. 
B) 1 car. 
C) 1/5 of a car. 
D) 1/50 of a car.

Question 13

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

Accepted Answer

A) Dan has the comparative advantage in smoothies, but Tracy has the absolute advantage in smoothies. 
B) Dan has the comparative and absolute advantage in sandwiches. 
C) Dan has the comparative and absolute advantage in smoothies. 
D) Dan has the comparative advantage in sandwiches, but Tracy has the absolute advantage in sandwiches. 
A) Dan has the comparative advantage in smoothies, but Tracy has the absolute advantage in smoothies. 
B) Dan has the comparative and absolute advantage in sandwiches. 
C) Dan has the comparative and absolute advantage in smoothies. 
D) Dan has the comparative advantage in sandwiches, but Tracy has the absolute advantage in sandwiches.

Question 14

The accompanying figure shows the production possibilities curve for the island of Genovia:    
If 500 cars are produced in Genovia, a maximum of ________ tons of agricultural products can be produced.

Accepted Answer

A) 50,000 
B) 25,000 
C) 45,000 
D) 40,000 
A) 50,000 
B) 25,000 
C) 45,000 
D) 40,000

Question 15

Consider a graph of a production possibilities curve. If a producer is operating at an inefficient point, then that producer:

Accepted Answer

A) cannot produce more of one good without giving up some of the other good. 
B) can produce more of one good without producing less of the other good. 
C) must be at an unattainable point on the production possibilities curve. 
D) must be specializing in activities for which it has a comparative advantage. 
A) cannot produce more of one good without giving up some of the other good. 
B) can produce more of one good without producing less of the other good. 
C) must be at an unattainable point on the production possibilities curve. 
D) must be specializing in activities for which it has a comparative advantage.

Question 16

On a graph of a production possibilities curve, an inefficient point is:

Accepted Answer

A) necessarily an attainable point. 
B) not necessarily an attainable point. 
C) necessarily an unattainable point. 
D) possibly an unattainable point. 
A) necessarily an attainable point. 
B) not necessarily an attainable point. 
C) necessarily an unattainable point. 
D) possibly an unattainable point.

Question 17

The slope of a production possibilities curve is ________ because ________.

Accepted Answer

A) negative; producing more of one good requires producing less of the other 
B) negative; producing less of one good requires producing less of the other 
C) positive; producing more of one good requires producing more of the other 
D) positive; producing more of one good requires producing less of the other 
A) negative; producing more of one good requires producing less of the other 
B) negative; producing less of one good requires producing less of the other 
C) positive; producing more of one good requires producing more of the other 
D) positive; producing more of one good requires producing less of the other

Question 18

In general, individuals and nations should specialize in producing goods ________ other individuals or nations.

Accepted Answer

A) that they can produce more quickly than 
B) that they can produce less quickly than 
C) for which they have a lower opportunity cost compared to 
D) for which they have a higher opportunity cost compared to 
A) that they can produce more quickly than 
B) that they can produce less quickly than 
C) for which they have a lower opportunity cost compared to 
D) for which they have a higher opportunity cost compared to

Question 19

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}
\hline & \text { Cars Sold } & \text { Trucks Sold } \
\hline \text { Larry } & 10 & 5 \
\hline \text { Joe } & 9 & 9 \
\hline \text { Ralph } & 3 & 12 \
\hline
\end{array}$  
Based on last month's data, ________ should specialize in truck sales, and ________ should specialize in car sales.

Accepted Answer

A) Joe; Ralph 
B) Ralph; Larry 
C) Larry; Ralph 
D) Larry; Joe 
A) Joe; Ralph 
B) Ralph; Larry 
C) Larry; Ralph 
D) Larry; Joe

Question 20

The production possibilities curve shows:

Accepted Answer

A) the minimum amount of one good that can be produced for every possible production level of the other good. 
B) how increasing the resources used to produce one good increases the production of the other good. 
C) the maximum amount of one good that can be produced for every possible production level of the other good. 
D) how increasing the production of one good allows production of the other good to also rise. 
A) the minimum amount of one good that can be produced for every possible production level of the other good. 
B) how increasing the resources used to produce one good increases the production of the other good. 
C) the maximum amount of one good that can be produced for every possible production level of the other good. 
D) how increasing the production of one good allows production of the other good to also rise.

Exam 2: Comparative Advantage

Refer to the accompanying table. According to the table, Pat has the absolute advantage in: Pizzas Made Per Hour Pizzas Delivered Per Hour Corey 12 6 Pat 10 15

One reason there is political opposition to international trade is that:

If a given production combination is efficient, then it must be:

Working efficiently, Jordan can write 3 essays and outline 4 chapters each week. It must be true that:

If a nation can produce a more computers per year than any other nation, that nation has a(n)________ advantage in the production of computers.

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts. Point Y is ________, and point V is ________.

Refer to the accompanying figure. If this economy is currently producing at point C, then the opportunity cost of providing 100 additional units of medical care would be:

Refer to the accompanying figure. Moving from point B to point A, the opportunity cost of 25 more salads is:

When a nation reduces the barriers to international trade:

If a nation has the lowest opportunity cost of producing a good, that nation has a(n)________ in the production of that good.

The accompanying figure shows the production possibilities curve for the island of Genovia: The opportunity cost of producing one ton of agricultural products in Genovia is:

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

The accompanying figure shows the production possibilities curve for the island of Genovia: If 500 cars are produced in Genovia, a maximum of ________ tons of agricultural products can be produced.

Consider a graph of a production possibilities curve. If a producer is operating at an inefficient point, then that producer:

On a graph of a production possibilities curve, an inefficient point is:

The slope of a production possibilities curve is ________ because ________.

In general, individuals and nations should specialize in producing goods ________ other individuals or nations.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars Sold Trucks Sold Larry 10 5 Joe 9 9 Ralph 3 12 Based on last month's data, ________ should specialize in truck sales, and ________ should specialize in car sales.

The production possibilities curve shows:

Thinking Like an Economist

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts. Point Y is , and point V is .

The slope of a production possibilities curve is because .

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars Sold Trucks Sold Larry 10 5 Joe 9 9 Ralph 3 12 Based on last month's data, should specialize in truck sales, and should specialize in car sales.