Question 1

To calculate the opportunity cost per unit,you divide the decrease in the quantity of the forgone item by the

Accepted Answer

A) decrease in the quantity of the other item. 
B) increase in the quantity of the other item obtained. 
C) price of the item obtained. 
D) price of the item forgone. 
E) price of the item obtained and then multiply by the price of the item forgone. 
A) decrease in the quantity of the other item. 
B) increase in the quantity of the other item obtained. 
C) price of the item obtained. 
D) price of the item forgone. 
E) price of the item obtained and then multiply by the price of the item forgone.

Question 2

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

Accepted Answer

A) dollar value of the resources used to produce the good. 
B) amount of the other good or service that must be forgone. 
C) dollar value of the additional output. 
D) area in the arc between the PPF and a straight line drawn between the starting point and the ending point. 
E) None of the above answers is correct. 
A) dollar value of the resources used to produce the good. 
B) amount of the other good or service that must be forgone. 
C) dollar value of the additional output. 
D) area in the arc between the PPF and a straight line drawn between the starting point and the ending point. 
E) None of the above answers is correct.

Question 3

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

Accepted Answer

A) they might benefit from trading,but we need more information to determine in which task they should specialize. 
B) neither Toni nor Tom can benefit from trading with each other. 
C) Toni should specialize in sewing,and Tom should specialize in ironing. 
D) Toni cannot benefit from trading with Tom,but Tom can benefit from trading with Toni. 
E) Tom cannot benefit from trading with Toni,but Toni can benefit from trading with Tom. 
A) they might benefit from trading,but we need more information to determine in which task they should specialize. 
B) neither Toni nor Tom can benefit from trading with each other. 
C) Toni should specialize in sewing,and Tom should specialize in ironing. 
D) Toni cannot benefit from trading with Tom,but Tom can benefit from trading with Toni. 
E) Tom cannot benefit from trading with Toni,but Toni can benefit from trading with Tom.

Question 4

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Accepted Answer

A) The opportunity cost of moving from point C to point B is greater than the movement from point B to point A. 
B) The opportunity cost of moving from point C to point B is the same as the movement from point B to point A. 
C) The opportunity cost of moving from point C to point B is less than the movement from point B to point A. 
D) The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A. 
E) More information is needed to determine how the two opportunity costs compare. 
A) The opportunity cost of moving from point C to point B is greater than the movement from point B to point A. 
B) The opportunity cost of moving from point C to point B is the same as the movement from point B to point A. 
C) The opportunity cost of moving from point C to point B is less than the movement from point B to point A. 
D) The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A. 
E) More information is needed to determine how the two opportunity costs compare.

Question 5

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of ________ reflects ________.

Accepted Answer

A) 500 books and 1000 tables;an inefficient but attainable point 
B) 1000 books and 500 tables;an efficient point 
C) 1000 books and 1000 tables;a free lunch 
D) 500 books and 500 tables;an attainable and efficient point 
E) 1000 books and 1500 tables;a free lunch 
A) 500 books and 1000 tables;an inefficient but attainable point 
B) 1000 books and 500 tables;an efficient point 
C) 1000 books and 1000 tables;a free lunch 
D) 500 books and 500 tables;an attainable and efficient point 
E) 1000 books and 1500 tables;a free lunch

Question 6

Other things equal,if Mexico devotes more resources to train its population than Spain,

Accepted Answer

A) Mexico will be able to eliminate opportunity cost faster than Spain. 
B) Mexico will be able to eliminate scarcity faster than Spain. 
C) Spain will grow faster than Mexico. 
D) Mexico will have more current consumption than Spain. 
E) Mexico will grow faster than Spain. 
A) Mexico will be able to eliminate opportunity cost faster than Spain. 
B) Mexico will be able to eliminate scarcity faster than Spain. 
C) Spain will grow faster than Mexico. 
D) Mexico will have more current consumption than Spain. 
E) Mexico will grow faster than Spain.

Question 7

-In the above figure,Jack's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

Accepted Answer

A) 1 gallon 
B) 1/2 of a gallon 
C) 6 gallons 
D) 1/4 of a gallon 
E) 2 gallons 
A) 1 gallon 
B) 1/2 of a gallon 
C) 6 gallons 
D) 1/4 of a gallon 
E) 2 gallons

Question 8

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Accepted Answer

Having an absolute advantage doesn't mea

Question 9

Production efficiency occurs

Accepted Answer

A) anywhere inside or on the production possibilities frontier. 
B) when the total cost of production is minimized. 
C) at all points on the production possibilities frontier. 
D) at only one point on the production possibilities frontier. 
E) at all points inside the production possibilities frontier. 
A) anywhere inside or on the production possibilities frontier. 
B) when the total cost of production is minimized. 
C) at all points on the production possibilities frontier. 
D) at only one point on the production possibilities frontier. 
E) at all points inside the production possibilities frontier.

Question 10

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its ________ axis,this country ________.

Accepted Answer

A) vertical;will experience greater economic growth 
B) vertical;will not face opportunity costs 
C) horizontal;will have a larger chance at economic growth 
D) horizontal;faces larger trade offs 
E) vertical;is operating at an inefficient point 
A) vertical;will experience greater economic growth 
B) vertical;will not face opportunity costs 
C) horizontal;will have a larger chance at economic growth 
D) horizontal;faces larger trade offs 
E) vertical;is operating at an inefficient point

Question 11

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Accepted Answer

A) 2 gallons 
B) 1/2 of a gallon 
C) 4 gallons 
D) 1 gallon 
E) 1/4 of a gallon 
A) 2 gallons 
B) 1/2 of a gallon 
C) 4 gallons 
D) 1 gallon 
E) 1/4 of a gallon

Question 12

-Omar and John can fix computers or write computer programs.The table above shows the number of computers they can fix and the lines of code they can write in a day.
a.Who,if anyone,has the absolute advantage?
b.Who has the comparative advantage in fixing computers? Why?
c.Who has the comparative advantage in writing programs? Why?

Accepted Answer

a.Omar has an absolute advantage in fixi

Question 13

Gains from trade

Accepted Answer

A) occur when one party to the trade has an absolute advantage in both goods. 
B) result in being able to consume beyond the trading individuals' production possibilities frontiers. 
C) occur when people do not specialize. 
D) occur when opportunity costs are equal. 
E) always benefit one party but not the other party of any trade. 
A) occur when one party to the trade has an absolute advantage in both goods. 
B) result in being able to consume beyond the trading individuals' production possibilities frontiers. 
C) occur when people do not specialize. 
D) occur when opportunity costs are equal. 
E) always benefit one party but not the other party of any trade.

Question 14

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will produce ________ and France will produce ________.

Accepted Answer

A) wheat;wheat 
B) wheat;fish 
C) fish;wheat 
D) fish;fish 
E) both wheat and fish;both wheat and fish 
A) wheat;wheat 
B) wheat;fish 
C) fish;wheat 
D) fish;fish 
E) both wheat and fish;both wheat and fish

Question 15

Which of the following would most likely cause a country's production possibilities set to shift outward at every point along the frontier?

Accepted Answer

A) a decrease in idle capital 
B) a decrease in unemployment 
C) a technological advance in only one sector of the economy 
D) a general technological advance that affects all sectors of the economy 
E) none of the above 
A) a decrease in idle capital 
B) a decrease in unemployment 
C) a technological advance in only one sector of the economy 
D) a general technological advance that affects all sectors of the economy 
E) none of the above

Question 16

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat for the United Kingdom?

Accepted Answer

A) 1/4 of a pound of fish 
B) 1/2 of a pound of fish 
C) 1 pound of fish 
D) 200 pounds of fish 
E) 2 pounds of fish 
A) 1/4 of a pound of fish 
B) 1/2 of a pound of fish 
C) 1 pound of fish 
D) 200 pounds of fish 
E) 2 pounds of fish

Question 17

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What would be the opportunity cost to increase the production of rice to 12 tons?

Accepted Answer

A) 6 thousand bottles of wine 
B) 15 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 6 tons of rice 
E) Nothing,it is a free lunch. 
A) 6 thousand bottles of wine 
B) 15 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 6 tons of rice 
E) Nothing,it is a free lunch.

Question 18

Why do nations engage in international trade?

Accepted Answer

Nations engage in international trade be

Question 19

The opportunity cost of economic growth is

Accepted Answer

A) 0,because it means an expansion of production possibilities. 
B) the decrease in the current production of productive factors. 
C) a slower accumulation of human capital. 
D) the decrease in the current production of consumption goods. 
E) the increase in the nation's capital stock and/or its technology. 
A) 0,because it means an expansion of production possibilities. 
B) the decrease in the current production of productive factors. 
C) a slower accumulation of human capital. 
D) the decrease in the current production of consumption goods. 
E) the increase in the nation's capital stock and/or its technology.

Question 20

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other,only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect.Absolute adva

To calculate the opportunity cost per unit,you divide the decrease in the quantity of the forgone item by the

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of reflects .

Other things equal,if Mexico devotes more resources to train its population than Spain,

-In the above figure,Jack's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Production efficiency occurs

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its axis,this country .

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Gains from trade

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will produce and France will produce .

Which of the following would most likely cause a country's production possibilities set to shift outward at every point along the frontier?

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat for the United Kingdom?

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What would be the opportunity cost to increase the production of rice to 12 tons?

Why do nations engage in international trade?

The opportunity cost of economic growth is

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other,only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Getting Started

The Usand Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 3: The Economic Problem

To calculate the opportunity cost per unit,you divide the decrease in the quantity of the forgone item by the

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of ________ reflects ________.

Other things equal,if Mexico devotes more resources to train its population than Spain,

-In the above figure,Jack's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Production efficiency occurs

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its ________ axis,this country ________.

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Gains from trade

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will produce ________ and France will produce ________.

Which of the following would most likely cause a country's production possibilities set to shift outward at every point along the frontier?

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat for the United Kingdom?

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What would be the opportunity cost to increase the production of rice to 12 tons?

Why do nations engage in international trade?

The opportunity cost of economic growth is

"When countries specialize in producing the good in which they have a comparative advantage and then trade with each other,only the country with the absolute advantage gains." Is the previous statement correct or incorrect? Briefly explain your answer.

Getting Started

The Usand Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of reflects .

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its axis,this country .

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will produce and France will produce .