Question 1

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Accepted Answer

A)   Chile should make televisions and trade them to the United States in exchange for potatoes, because the United States has an absolute advantage in the production of potatoes.
B)   Chile should make potatoes and trade them to the United States in exchange for televisions, because the United States has an absolute advantage in the production of potatoes.
C)   The United States can benefit from trading with Chile, but Chile will receive no benefit.
D)   The United States has an absolute advantage at producing both televisions and potatoes.E) A) and B)
F) B) and C)

Question 2

A realistic production possibilities curve is _____, while a simple production possibilities curve _____.

Accepted Answer

A)   bowed outward; has constant opportunity costs.
B)   straight; has constant opportunity costs.
C)   straight; bows outward.
D)   bowed outward has increasing opportunity costs.E) A) and B)
F) All of the above

Question 3

Consider the production possibilities frontier displayed in the figure shown. If a society with this frontier chooses to produce 200 bushels of apples, it can produce no more than:

Accepted Answer

A)   20 watermelons.
B)   15 watermelons.
C)   10 watermelons.
D)   5 watermelons.E) C) and D)
F) B) and D)

Question 4

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country B could produce?

Accepted Answer

A)   (7,200 bananas, 2,400 tomatoes)  and (3,600 bananas, 1,200 tomatoes) 
B)   (7,200 bananas, 0 tomatoes)  and (4,000 bananas, 1,200 tomatoes) 
C)   (3,600 bananas, 1,200 tomatoes)  and (1,800 bananas, 1,600 tomatoes) 
D)   (1,800 bananas, 1,800 tomatoes)  and (900 bananas, 2,200 tomatoes) E) A) and B)
F) A) and C)

Question 5

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Accepted Answer

A)   Country A has a comparative advantage at producing cars.
B)   Country A has a comparative advantage at producing trucks.
C)   Country A has a comparative advantage at producing both cars and trucks.
D)   Country B has a comparative advantage at producing both cars and trucks.E) C) and D)
F) A) and B)

Question 6

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Accepted Answer

A)   They will be forced to consume less of the goods the country had a comparative advantage at producing.
B)   They will be better off than before as long as the country has an absolute advantage at producing any good.
C)   They will be better off than before only if the country has an absolute advantage at producing most of the goods they consume.
D)   They will be better off than before only if they have a comparative advantage at producing all goods.E) A) and B)
F) A) and C)

Question 7

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Accepted Answer

A)   countries import and export certain goods.
B)   individuals typically work at one job, and buy the other goods and services they need.
C)   we allow ourselves to be interdependent on others.
D)   All of these statements are true.E) None of the above
F) C) and D)

Question 8

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

Accepted Answer

A)   Country A should specialize in cars, Country B should specialize in trucks, and both could benefit from trade.
B)   Country A should specialize in trucks, Country B should specialize in cars, and both will benefit from trade.
C)   Country A will not benefit from trade.
D)   Country B will lose by trading with Country A.E) B) and C)
F) All of the above

Question 9

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve could choose to produce:

Accepted Answer

A)   I, II, or IV.
B)   I, II, or III.
C)   I, IV, or III.
D)   II, III, or IV.E) A) and D)
F) A) and B)

Question 10

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Accepted Answer

A)   The United States has a comparative advantage at producing nets.
B)   Chile has a comparative advantage at producing nets.
C)   Both the United States and Chile have a comparative advantage at producing nets.
D)   Neither the United States nor Chile has a comparative advantage at producing nets.E) None of the above
F) All of the above

Question 11

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Accepted Answer

A)   5 apples for each pair of shoes.
B)   5 pairs of shoes for each apple.
C)   1/55 apple for each pair of shoes.
D)   1 pair of shoes for every 2 apples.E) B) and C)
F) All of the above

Question 12

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Accepted Answer

A)   Country A has a comparative advantage at producing cars and Country B has a comparative advantage at producing trucks.
B)   Country A has a comparative advantage at producing trucks and Country B has a comparative advantage at producing cars.
C)   Country A has a comparative advantage at producing both cars and trucks.
D)   Country B has a comparative advantage at producing both cars and trucks.E) A) and B)
F) A) and D)

Question 13

Two countries will choose to specialize and trade only if:

Accepted Answer

A)   the terms of trade fall between the two nations' opportunity costs for producing the goods on their own.
B)   the opportunity costs are the same for the two nations.
C)   the opportunity costs for producing the goods on their own are astronomically high.
D)   one country has an absolute advantage at producing both goods, but a comparative advantage at producing only one good.E) B) and D)
F) A) and D)

Question 14

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon is:

Accepted Answer

A)   10 bushels of apples.
B)   20 bushels of apples.
C)   30 bushels of apples.
D)   40 bushels of apples.E) A) and D)
F) B) and C)

Exam 2: Specializationand Exchange

Two countries will choose to specialize and trade only if:

Correct Answer
verified

A realistic production possibilities curve is _, while a simple production possibilities curve _.

Correct Answer
verified

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Correct Answer
verified

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Correct Answer
verified

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown. If a society with this frontier chooses to produce 200 bushels of apples, it can produce no more than:

Correct Answer
verified

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon is:

Correct Answer
verified

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

Correct Answer
verified

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Correct Answer
verified

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Correct Answer
verified

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve could choose to produce:

Correct Answer
verified

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Correct Answer
verified

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country B could produce?

Correct Answer
verified

Exam 2: Specializationand Exchange

Two countries will choose to specialize and trade only if:

Correct AnswerverifiedShow Answer

A realistic production possibilities curve is _____, while a simple production possibilities curve _____.

Correct AnswerverifiedShow Answer

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

Correct AnswerverifiedShow Answer

Suppose that, given the same number of workers, the United States can produce twice as many televisions or 20 times as many potatoes as Chile. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 100 nets or catch 1,000 fish per day. A Chilean worker, on the other hand, can produce 40 nets or catch 400 fish per day. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. If a society with this frontier chooses to produce 200 bushels of apples, it can produce no more than:

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one watermelon is:

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After comparing each country's production possibilities frontier, it is clear that:

Correct AnswerverifiedShow Answer

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. How will this most likely affect the country's citizens?

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve could choose to produce:

Correct AnswerverifiedShow Answer

The concepts of comparative advantage, specialization, and trade can be useful in explaining why:

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country B could produce?

Correct AnswerverifiedShow Answer

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verified

A realistic production possibilities curve is _, while a simple production possibilities curve _.

Correct Answer
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