Question 1

The concepts of specialization and gains from trade can be applied to:

Accepted Answer

A)   international trade.
B)   why globalization has expanded recently.
C)   consumer decisions.
D)   household decisions.E) A) and B)
F) A) and C)

Question 2

Choosing to produce at any point within a production possibilities frontier is:

Accepted Answer

A)   inefficient, meaning the society would not be using all its available resources in their best possible uses.
B)   efficient, meaning the society would be using all its available resources in their best possible uses.
C)   unobtainable, meaning the society cannot produce that combination of goods.
D)   efficient but not attainable.E) All of the above
F) None of the above

Question 3

Consider the production possibilities frontier in the figure shown. As more and more cars are produced the opportunity cost of producing more cars:

Accepted Answer

A)   decreases.
B)   stays the same.
C)   increases.
D)   decreases then increases.E) All of the above
F) B) and D)

Question 4

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _______, and Country B's is __________.

Accepted Answer

A)   5; 3
B)   30; 3
C)   1/5; 1/3
D)   1/5; 1/3.E) C) and D)
F) A) and D)

Question 5

The production possibilities frontier:

Accepted Answer

A)   can show all possible combinations of goods but not tell us which combination society should choose.
B)   can show the best combination of goods which society should choose.
C)   cannot show all possible combinations of goods because society is typically inefficient.
D)   can show us which possible combinations of goods society should choose, but cannot tell us which points will be inefficient.E) A) and B)
F) None of the above

Question 6

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. When trade opens up, the United States should produce:

Accepted Answer

A)   both goods, since they have an absolute advantage in both goods, and not trade.
B)   only shoes, since they have a comparative advantage in the production of shoes, and not trade.
C)   apples, since they have a comparative advantage in the production of apples, and not trade.
D)   only apples, since they have a comparative advantage in the production of apples, and trade for shoes.E) B) and C)
F) All of the above

Question 7

Which of the following statements about absolute and comparative advantage is not true? A country may have:

Accepted Answer

A)   a comparative advantage but not an absolute advantage in the production of a good.
B)   an absolute advantage but not a comparative advantage in the production of a good
C)   the absolute advantage in the production of all goods.
D)   neither absolute nor comparative advantage in the production of any goods.E) A) and D)
F) A) and C)

Question 8

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?

Accepted Answer

A)   (20 watermelons, 400 bushels of apples) 
B)   (15 watermelons, 100 bushels of apples) 
C)   (10 watermelons, 300 bushels of apples) 
D)   (10 watermelons, 400 bushels of apples) E) A) and B)
F) A) and C)

Question 9

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the comparative advantage in the production of:

Accepted Answer

A)   iPods only.
B)   tablets only.
C)   both iPods and tablets.
D)   neither iPods nor tablets.E) B) and C)
F) A) and C)

Question 10

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B Which of the following statements is true? The opportunity cost of a truck in Country B is:

Accepted Answer

A)   12 cars.
B)   4 trucks.
C)   1.5 cars
D)   3 cars.E) B) and D)
F) None of the above

Question 11

Consider the production possibilities frontier displayed in the figure shown. The fact that the line slopes downward displays which economic concept?

Accepted Answer

A)   Production possibilities
B)   Trade-offs
C)   Specialization
D)   EfficiencyE) A) and B)
F) A) and C)

Question 12

If a wealthy nation such as the United States trades with a poorer, less developed nation like Cambodia, then it is likely true that:

Accepted Answer

A)   the United States is taking advantage of Cambodia and is the only beneficiary to the trade.
B)   Cambodia is pressured to enter trade and not benefiting at all.
C)   both the United States and Cambodia can benefit from trading.
D)   the United States is being charitable and not benefiting from the trade at all.E) B) and C)
F) A) and B)

Question 13

Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. For Jerry, the opportunity cost of building a fence is ________ dishes made.

Accepted Answer

A)   14
B)   7
C)   4
D)   2E) All of the above
F) None of the above

Question 14

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of a bushel of apples is:

Accepted Answer

A)   3/20 watermelons.
B)   1/20 watermelons.
C)   1/40 watermelons.
D)   1/30 watermelons.E) B) and C)
F) All of the above

Question 15

People often choose to specialize and trade because:

Accepted Answer

A)   it will allow them to enjoy more goods than they can create on their own.
B)   they can consume a bundle of goods on their production possibilities frontier.
C)   it always allows them to produce at a point beyond their own production possibilities frontier.
D)   they can take advantage of another nation's poor choices.E) A) and B)
F) A) and C)

Question 16

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. Which of the following statements is true?

Accepted Answer

A)   The United States has the absolute advantage in the production of both shoes and apples.
B)   Canada has the absolute advantage in the production of both shoes and apples.
C)   The United States has the absolute advantage in the production of shoes and Canada has the absolute advantage in the production of apples.
D)   Canada has the absolute advantage in the production of shoes and the United States has the absolute advantage in the production of apples.E) C) and D)
F) B) and C)

Question 17

Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Because Tom has a ____________ opportunity cost for one fence compared to Jerry, we know Tom has _________________________.

Accepted Answer

A)   higher; the comparative advantage in fence production
B)   lower; the comparative advantage in fence production
C)   similar; no advantage in production of either good
D)   higher; the comparative advantage in dish productionE) None of the above
F) A) and D)

Question 18

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. Canada has the ____________ opportunity cost of a pair of shoes than the United States, so: ____________.

Accepted Answer

A)   higher; Canada should specialize in shoe production
B)   lower; Canada should specialize in apple production
C)   higher; Canada should specialize in apple production
D)   lower; Canada should specialize in shoe productionE) A) and B)
F) B) and C)

Question 19

When a country is producing goods and services efficiently it:

Accepted Answer

A)   is producing at a point on or below its production possibilities frontier.
B)   is getting the most output by using all its available resources.
C)   has unemployed workers.
D)   is able to reach a point beyond its production possibilities frontier.E) B) and C)
F) A) and B)

Question 20

Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:

Accepted Answer

A)   at point C because it is the safest.
B)   at point B because it represents the most the society can produce.
C)   at any point that produce some of each good.
D)   at any point on the frontier rather than inside it.E) B) and C)
F) A) and D)

Exam 2: Specialization and Exchange

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. Canada has the opportunity cost of a pair of shoes than the United States, so: .

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?

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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the comparative advantage in the production of:

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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B Which of the following statements is true? The opportunity cost of a truck in Country B is:

Correct Answer
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Which of the following statements about absolute and comparative advantage is not true? A country may have:

Correct Answer
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Consider the production possibilities frontier in the figure shown. As more and more cars are produced the opportunity cost of producing more cars:

Correct Answer
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When a country is producing goods and services efficiently it:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. The fact that the line slopes downward displays which economic concept?

Correct Answer
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The production possibilities frontier:

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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. Which of the following statements is true?

Correct Answer
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Choosing to produce at any point within a production possibilities frontier is:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of a bushel of apples is:

Correct Answer
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People often choose to specialize and trade because:

Correct Answer
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If a wealthy nation such as the United States trades with a poorer, less developed nation like Cambodia, then it is likely true that:

Correct Answer
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Correct Answer
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The concepts of specialization and gains from trade can be applied to:

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _, and Country B's is ____.

Correct Answer
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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. When trade opens up, the United States should produce:

Correct Answer
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Exam 2: Specialization and Exchange

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. Canada has the ____________ opportunity cost of a pair of shoes than the United States, so: ____________.

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Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?

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Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the comparative advantage in the production of:

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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? The opportunity cost of a truck in Country B is:

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Which of the following statements about absolute and comparative advantage is not true? A country may have:

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Consider the production possibilities frontier in the figure shown. As more and more cars are produced the opportunity cost of producing more cars:

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When a country is producing goods and services efficiently it:

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Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:

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Consider the production possibilities frontier displayed in the figure shown. The fact that the line slopes downward displays which economic concept?

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The production possibilities frontier:

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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. Which of the following statements is true?

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Choosing to produce at any point within a production possibilities frontier is:

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Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of a bushel of apples is:

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People often choose to specialize and trade because:

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If a wealthy nation such as the United States trades with a poorer, less developed nation like Cambodia, then it is likely true that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The concepts of specialization and gains from trade can be applied to:

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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _______, and Country B's is __________.

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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. When trade opens up, the United States should produce:

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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. Canada has the opportunity cost of a pair of shoes than the United States, so: .

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _, and Country B's is ____.

Correct Answer
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Correct Answer
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