Question 1

Which of the following is not correct?

Accepted Answer

A)   Economists are generally united in their support of free trade.
B)   The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time.
C)   David Ricardo argued that Britain should not restrict imports of grain.
D)   Economists' opposition to trade restrictions is still based largely on the principle of absolute advantage.E) A) and B)
F) A) and C)

Question 2

In one month,Moira can knit 2 sweaters or 4 scarves.In one month,Tori can knit 1 sweater or 3 scarves.Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Accepted Answer

A) True 
 B)False

Question 3

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

Accepted Answer

A) True 
 B)False

Question 4

Table 3-1
Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-1.Assume that Andia and Zardia each has 360 minutes available.If each person divides his time equally between the production of wheat and beef,then total production is

Accepted Answer

A)   10.5 bushels of wheat and 16.5 pounds of beef.
B)   21 bushels of wheat and 33 pounds of beef.
C)   35 bushels of wheat and 22 pounds of beef.
D)   42 bushels of wheat and 66 pounds of beef.E) A) and D)
F) C) and D)

Question 5

Figure 3-2
Peru's Production Possibilities Frontier 
-Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

Accepted Answer

A)   for Peru,it is more costly to produce emeralds than it is to produce rubies.
B)   Peru will produce more emeralds and fewer rubies as time goes by.
C)   Peru faces a tradeoff between producing emeralds and producing rubies.
D)   Peru should specialize in producing rubies.E) B) and D)
F) B) and C)

Question 6

Table 3-18
Chris and Tony's Production Opportunities
 
-Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.Which of the following prices would result in a mutually advantageous trade between Chris and Tony?

Accepted Answer

A)   1 lb.of tomatoes for 23 jars of sauce
B)   1 lb.of tomatoes for 27 jars of sauce
C)   1 lb.of tomatoes for 33 jars of sauce
D)   .Both a and b are correct.E) B) and D)
F) A) and C)

Question 7

Harry is a computer company executive,earning $200 per hour managing the company and promoting its products.His daughter Quinn is a high school student,earning $6 per hour helping her grandmother on the farm.Harry's computer is broken.He can repair it himself in one hour.Quinn can repair it in 10 hours.Harry's opportunity cost of repairing the computer is lower than Quinn's.

Accepted Answer

A) True 
 B)False

Question 8

Goods produced abroad and sold domestically are called

Accepted Answer

A)   exports.
B)   imports.
C)   exchange rates.
D)   opportunity costs.E) A) and B)
F) None of the above

Question 9

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-3.Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

Accepted Answer

A)   5 toothbrushes and 11 hairbrushes
B)   10 toothbrushes and 9 hairbrushes
C)   20 toothbrushes and 6 hairbrushes
D)   30 toothbrushes and 3 hairbrushesE) B) and D)
F) A) and D)

Question 10

Table 3-1
Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-1.Andia has an absolute advantage in the production of

Accepted Answer

A)   wheat and Zardia has an absolute advantage in the production of beef.
B)   beef and Zardia has an absolute advantage in the production of wheat.
C)   both goods and Zardia has an absolute advantage in the production of neither good.
D)   neither good and Zardia has an absolute advantage in the production of both goods.E) None of the above
F) A) and B)

Question 11

Figure 3-4
 Perry’s Production Possibilities Frontier
 Jordan’s Production Possibilities Frontier
-Refer to Figure 3-4.If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems,then

Accepted Answer

A)   Perry and Jordan will both gain from this trade.
B)   Perry will gain from this trade,but Jordan will not.
C)   Jordan will gain from this trade,but Perry will not.
D)   neither Perry nor Jordan will gain from this trade.E) A) and B)
F) B) and C)

Question 12

Table 3-9
Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies.
 
-Refer to Table 3-9.Barb has an absolute advantage in

Accepted Answer

A)   both setting up and testing computers and a comparative advantage in setting up computers.
B)   both setting up and testing computers and a comparative advantage in testing computers.
C)   neither setting up nor testing computers and a comparative advantage in setting up computers.
D)   neither setting up nor testing computers and a comparative advantage in testing computers.E) A) and D)
F) None of the above

Question 13

Define absolute advantage.

Accepted Answer

Absolute advantage m...

Question 14

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn,then

Accepted Answer

A)   Iowa has a comparative advantage in the production of corn.
B)   Iowa has an absolute advantage in the production of corn.
C)   Iowa should import corn from Oklahoma.
D)   Oklahoma should produce just enough corn to satisfy its own residents' demands.E) None of the above
F) A) and B)

Question 15

For a self-sufficient producer,the production possibilities frontier

Accepted Answer

A)   is the same as the consumption possibilities frontier.
B)   is greater than the consumption possibilities frontier.
C)   is less than the consumption possibilities frontier.
D)   is always a straight line.E) A) and D)
F) B) and C)

Question 16

Suppose a gardener produces both green beans and corn in her garden.If she must give up 14 bushels of corn to get 5 bushels of green beans,then her opportunity cost of 1 bushel of green beans is

Accepted Answer

A)   0.36 bushel of corn.
B)   2.8 bushels of corn.
C)   14 bushels of corn.
D)   70 bushels of corn.E) A) and B)
F) A) and C)

Question 17

Which of the following is not a reason people choose to depend on others for goods and services?

Accepted Answer

A)   to improve their lives
B)   to allow them to enjoy a greater variety of goods and services
C)   to consume more of each good without working any more hours
D)   to allow people to produce outside their production possibilities frontiersE) All of the above
F) A) and D)

Question 18

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-11.In the nation of Cropitia,the opportunity cost of a pound of cheese is 1.5 pounds of ham.Bonovia and Cropitia both can gain from trading with one another if one pound of cheese trades for

Accepted Answer

A)   1.0 pound of ham.
B)   1.4 pounds of ham.
C)   2.1 pounds of ham.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 19

Table 3-4
 
-Refer to Table 3-4.Which good(s) does Denmark have an absolute advantage producing?

Accepted Answer

A)   both eggs and ham.
B)   eggs but not ham.
C)   ham but not eggs.
D)   neither ham nor eggs.E) A) and B)
F) A) and C)

Question 20

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Accepted Answer

A)   0.75 pound.
B)   0.80 pound.
C)   1.00 pounds.
D)   1.25 pounds.E) A) and D)
F) B) and C)

Exam 3: Interdependence and the Gains From Trade

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.Andia has an absolute advantage in the production of

Correct Answer
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Goods produced abroad and sold domestically are called

Correct Answer
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Which of the following is not a reason people choose to depend on others for goods and services?

Correct Answer
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Correct Answer
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Suppose a gardener produces both green beans and corn in her garden.If she must give up 14 bushels of corn to get 5 bushels of green beans,then her opportunity cost of 1 bushel of green beans is

Correct Answer
verified

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Correct Answer
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Correct Answer
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If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn,then

Correct Answer
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Define absolute advantage.

Correct Answer
verified
Absolute advantage m...
View Answer

Table 3-4 -Refer to Table 3-4.Which good(s) does Denmark have an absolute advantage producing?

Correct Answer
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A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

Correct Answer
verified

In one month,Moira can knit 2 sweaters or 4 scarves.In one month,Tori can knit 1 sweater or 3 scarves.Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Correct Answer
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Which of the following is not correct?

Correct Answer
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Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems,then

Correct Answer
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Correct Answer
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Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

Correct Answer
verified

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Barb has an absolute advantage in

Correct Answer
verified

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

Correct Answer
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Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.Assume that Andia and Zardia each has 360 minutes available.If each person divides his time equally between the production of wheat and beef,then total production is

Correct Answer
verified

For a self-sufficient producer,the production possibilities frontier

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.Andia has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Goods produced abroad and sold domestically are called

Correct AnswerverifiedShow Answer

Which of the following is not a reason people choose to depend on others for goods and services?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose a gardener produces both green beans and corn in her garden.If she must give up 14 bushels of corn to get 5 bushels of green beans,then her opportunity cost of 1 bushel of green beans is

Correct AnswerverifiedShow Answer

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn,then

Correct AnswerverifiedShow Answer

Define absolute advantage.

Correct AnswerverifiedAbsolute advantage m...View AnswerShow Answer

Table 3-4 -Refer to Table 3-4.Which good(s) does Denmark have an absolute advantage producing?

Correct AnswerverifiedShow Answer

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

Correct AnswerverifiedShow Answer

In one month,Moira can knit 2 sweaters or 4 scarves.In one month,Tori can knit 1 sweater or 3 scarves.Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems,then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

Correct AnswerverifiedShow Answer

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Barb has an absolute advantage in

Correct AnswerverifiedShow Answer

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

Correct AnswerverifiedShow Answer

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.Assume that Andia and Zardia each has 360 minutes available.If each person divides his time equally between the production of wheat and beef,then total production is

Correct AnswerverifiedShow Answer

For a self-sufficient producer,the production possibilities frontier

Correct AnswerverifiedShow Answer

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Absolute advantage m...
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