Deck 2: Comparative Advantage

Question 1

Suppose it takes Paul 3 hours to bake a cake and 2 hours to move the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn.Which of the following statements is correct?

A)Paul has the absolute advantage in baking cakes
B)Paul has the comparative in mowing the lawn
C)Paul has the comparative in baking cakes
D)Paul has the absolute advantage in mowing the lawn.

Answer 1

Paul has the comparative in baking cakes

Question 2

If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then ______ has a(n) ______ advantage in producing shoes.

A)Jane; absolute
B)Jane; comparative
C)Bob; absolute
D)Bob; comparative

Answer 2

Jane; absolute

Question 3

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

A)Les has a comparative advantage in producing pants.
B)Les has an absolute advantage in producing pants.
C)Eva has a comparative advantage in producing pants.
D)Les has both comparative and absolute advantage in producing pants.

Answer 3

Les has an absolute advantage in producing pants.

Question 4

Refer to the table below.Julia's opportunity cost of making a cake is:

A)60 cakes
B)6 cakes
C)6/5 of a cake
D)5/6 of a cake

Question 5

Refer to the table below.According to the table, Martha has the absolute advantage in:

A)pies.
B)neither pies nor cakes.
C)cakes.
D)both pies and cakes.

Question 6

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?

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 7

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

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

Question 8

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.

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

Question 9

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.What is the opportunity cost to Dan of making a sandwich?

A)1/3 of a smoothie
B)3 smoothies
C)15 smoothies
D)5 smoothies

Question 10

An individual has an absolute advantage in producing pizzas if that individual:

A)has a lower opportunity cost of producing pizzas than anyone else.
B)can produce more pizzas in a given amount of time than anyone else.
C)has a higher opportunity cost of producing pizzas than anyone else.
D)charges the lowest price for pizzas.

Question 11

Suppose Cathy and Lewis work in a bakery making pies and cakes.Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake.Which of the following statements is correct?

A)Cathy has a comparative advantage in pies, and Lewis has an absolute advantage in pies.
B)Cathy has a comparative and absolute advantage in pies.
C)Lewis has a comparative and absolute advantage in pies.
D)Lewis has a comparative advantage in pies, and Cathy has an absolute advantage in pies.

Question 12

Refer to the table below.Martha's opportunity cost of making of a pie is:

A)3/4 of a cake.
B)4/3 of a cake.
C)8 cakes.
D)80 cakes.

Question 13

If Al has an absolute advantage over Beth in preparing meals, then:

A)it takes Al more time to prepare a meal than Beth.
B)the problem of scarcity applies to Beth but not to Al.
C)Al's opportunity cost of preparing a meal is lower than is Beth's.
D)Al can prepare more meals in a given time period than Beth.

Question 14

Refer to the table below.Martha's opportunity cost of making a cake is:

A)3/4 of a pie.
B)4/3 of a pie.
C)6 pies.
D)60 pies.

Question 15

Refer to the table below.According to the table, Julia has the absolute advantage in:

A)pies.
B)neither pies nor cakes.
C)cakes.
D)both pies and cakes.

Question 16

Refer to the table below.Based on their comparative advantage, Martha should specialize in _______ while Julia should specialize in _______.

A)pies; cakes
B)cakes; pies
C)neither pies nor cakes; both pies and cakes
D)both pies and cakes; neither pies nor cakes

Question 17

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?

A)Tracy should specialize in sandwiches and smoothies.
B)Dan should specialize in smoothies, and Tracy should specialize in sandwiches.
C)Dan should specialize in sandwiches, and Tracy should specialize in smoothies.
D)Dan should specialize in both sandwiches and smoothies.

Question 18

Refer to the table above.______ has the comparative advantage in making pies and ______ the comparative advantage in making cakes.

A)Martha; Martha
B)Julia; Julia
C)Martha; Julia
D)Julia; Martha

Question 19

Larry has a comparative advantage over his classmates in writing term papers if he:

A)can write term papers faster than his classmates.
B)has an absolute advantage in writing term papers.
C)always earns an A on his term papers.
D)has a lower opportunity cost of writing term papers than his classmates.

Question 20

Which of the following statements is true?

A)Absolute advantage implies comparative advantage.
B)Comparative advantage does not require absolute advantage.
C)Absolute advantage requires comparative advantage.
D)Comparative advantage requires absolute advantage.

Question 21

Lou and Alex live together and share household chores.They like to cook some meals ahead of time and eat leftovers.The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. If Alex and Lou work out an efficient arrangement for these two chores, then under that arrangement:

A)Alex and Lou each would do half of the cooking and half of the cleaning.
B)Alex would do all of the cleaning, while Lou would do all the cooking.
C)Lou would do all of the cleaning and all of the cooking.
D)Lou would do all of the cleaning, while Alex would do all of the cooking.

Question 22

The United States generally has a comparative advantage in the development of technology because it has:

A)large amounts of natural resources.
B)a disproportionate share of the world's best research universities.
C)the greatest need for new technology.
D)patent laws, which no other country has.

Question 23

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Joe's opportunity cost of selling a truck is selling:

A)9 cars.
B)1 car.
C)4 cars.
D)1/3 of a car.

Question 24

Refer to the table below.Pat's opportunity cost of making a pizza is delivering:

A)3 pizzas
B)2 pizzas
C)3/2 of a pizza
D)2/3 of a pizza

Question 25

Suppose Cathy and Lewis work in a bakery making pies and cakes.Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake.Which of the following statements is correct?

A)Cathy should specialize in both pies and cakes.
B)There are no gains from specialization and trade.
C)Lewis should specialize in pies, and Cathy should specialize in cakes.
D)Cathy should specialize in pies, and Lewis should specialize in cakes.

Question 26

Ginger and Maryann are lost in the jungle, where the only things to eat are mangoes and fish.Ginger can gather more mangoes per hour than Maryann and can also catch more fish per hour than can Maryann.Therefore:

A)There are no gains to specialization and trade for Ginger.
B)There are no gains to specialization and trade for Maryann.
C)Maryann should specialize in the activity for which she has a comparative advantage.
D)Ginger should specialize in the activity for which she has an absolute advantage.

Question 27

Lou and Alex live together and share household chores.They like to cook some meals ahead of time and eat leftovers.The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. For Alex, the opportunity cost of cleaning one room is making ______ meal(s); for Lou the opportunity cost of cleaning one room is making ______ meal(s).

A)4; 4
B)1; 4/5
C)1; 5/4
D)3; 5

Question 28

Suppose Cathy and Lewis work in a bakery making pies and cakes.Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake.What is the opportunity cost to Cathy of making a cake?

A)2/3 of a pie.
B)1 pie.
C)1.5 pies.
D)1.33 pies.

Question 29

In general, individuals and nations should specialize in producing those goods for which they have a(n):

A)absolute advantage.
B)comparative advantage.
C)absolutely comparative advantage.
D)absolute advantage and a comparative advantage.

Question 30

Refer to the table below.Based on their comparative advantages, Pat should specialize in _______, and Corey should specialize in _______.

A)delivering pizza; making pizza
B)making pizza; delivering pizza
C)neither making pizza nor delivering pizza; both making pizza and delivering pizza
D)both making pizza and delivering pizza; neither making pizza nor delivering pizza

Question 31

The textbook notes that the last time a major league batter hit .400 was in 1941.This is because:

A)the average quality of batters has fallen.
B)the league imposes harsh penalties for steroid use.
C)specialization by pitchers, infielders, and outfielders has made it harder for batters to hit.
D)baseball diamonds have become larger.

Question 32

Lou and Alex live together and share household chores.They like to cook some meals ahead of time and eat leftovers.The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Which of the following is true?

A)Lou has both an absolute advantage and a comparative advantage over Alex in both tasks.
B)Alex has a comparative advantage over Lou in cleaning.
C)Lou has a comparative advantage over Alex in cleaning.
D)Alex has both an absolute advantage and a comparative advantage over Lou in both tasks.

Question 33

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Joe's opportunity cost of selling a car is ______ than Ralph's, and Joe's opportunity cost of selling a car is ______ than Larry's.

A)less; greater
B)greater; less
C)less; less
D)greater; greater

Question 34

The emergence of English as the de facto world language has _____ a comparative advantage in the production of books, movies and popular music:

A)given English­speaking countries
B)given non­English­speaking countries
C)had no effect on which country has
D)given all countries

Question 35

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, ______ has an absolute advantage in selling cars and ______ has an absolute advantage in selling trucks.

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

Question 36

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

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 37

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Larry's opportunity cost of selling a truck is selling:

A)10 cars.
B)1/2 of a car.
C)1 car.
D)2 cars.

Question 38

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, ______ should specialize in truck sales, and ______ should specialize in car sales.

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

Question 39

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen.Data for their sales last month are shown in this table: Based on last month's data, Ralph's opportunity cost of selling a truck is selling:

A)4 cars.
B)1/3 of a car.
C)3 cars.
D)1/4 of a car.

Question 40

Refer to the table below.According to the table, Corey has the absolute advantage in:

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

Question 41

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

A)production possibilities curve.
B)consumption possibilities curve.
C)production function.
D)supply curve.

Question 42

The figure below shows the production possibilities curve for the island of Genovia: The opportunity cost of producing a car in Genovia is:

A)5,000 tons of agricultural products.
B)500 tons of agricultural products.
C)5 tons of agricultural products.
D)50 tons of agricultural products.

Question 43

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Relative to point X, at point Y:

A)more dresses and more skirts are produced.
B)more skirts and fewer dresses are produced.
C)more dresses and fewer skirts are produced.
D)fewer skirts and fewer dresses are produced.

Question 44

The downward slope of the production possibilities curve illustrates the:

A)Scarcity Principle.
B)Cost­Benefit Principle.
C)Incentive Principle.
D)Principle of Comparative Advantage.

Question 45

The figure below 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.

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

Question 46

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

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 47

Refer to the figure below.If Pat and Chris were to specialize in the task in which each has a comparative advantage:

A)Chris would plant bulbs and Pat would remove trash.
B)Chris would remove trash and Pat would plant bulbs.
C)Pat and Chris would each spend half of their time each task.
D)both Pat and Chris would plant bulbs because they both have an absolute advantage in that task.

Question 48

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Point U is:

A)attainable.
B)efficient.
C)unattainable.
D)inefficient.

Question 49

Any combination of goods that can be produced with currently available resources is an:

A)attainable point.
B)efficient point.
C)inefficient point.
D)attainable and efficient point.

Question 50

Suppose Colin brews beer and makes cheese.If Colin can increase his production of beer without decreasing his production of cheese, then he is producing at an:

A)inefficient point.
B)efficient point.
C)unattainable point.
D)ideal point.

Question 51

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Of the labeled points, only ______ are efficient.

A)T and U
B)X, Y, and Z
C)W, X, Y, Z, and V
D)W, X, Y, Z, V, and T

Question 52

Refer to the figure below.For Pat, the opportunity cost of removing one bag of trash is planting:

A)100 bulbs.
B)5 bulbs.
C)1/100 of a bulb.
D)1/5 of a bulb.

Question 53

The United States was unable to maintain its dominance in the production of televisions because:

A)the highly technical skills necessary to produce televisions are greater in other countries.
B)the raw materials necessary to build televisions became scarce in the United States.
C)the product designs evolved too rapidly for engineers in the United States to keep up.
D)automated techniques allowed production to be outsourced to countries with less­skilled workers.

Question 54

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

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 55

On a graph of a production possibilities curve, if a point is attainable, then it:

A)must be efficient.
B)might or might not be efficient.
C)is efficient only if it does not exhaust all currently available resources.
D)must completely exhaust all currently available resources.

Question 56

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

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

Question 57

Refer to the figure below.For Pat, the opportunity cost of planting one bulb is removing:

A)20 bags of trash.
B)5 bags of trash.
C)1/20 of a bag of trash.
D)1/5 of a bag of trash.

Question 58

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Point T is:

A)attainable
B)efficient
C)both attainable and efficient
D)neither attainable nor efficient

Question 59

Points that lie outside the production possibilities curve are ______, and points that lie inside the production possibilities curve are ______.

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

Question 60

If a country is producing at point where an increase in the production of one good requires a reduction in the production of another good, then it must be producing at an:

A)inefficient point.
B)efficient point.
C)unattainable point.
D)undesirable point.

Question 61

If a linear, two­good production possibilities curve has a slope of ‒2, then:

A)having an additional unit of the good measured on the vertical axis means giving up 2 units of the good measured on the horizontal axis.
B)having an additional unit of the good measured on the vertical axis means giving up ½ of an unit of the good measured on the horizontal axis.
C)you have an absolute advantage in the good measured on the vertical axis.
D)you have a comparative advantage in the good measured on the vertical axis.

Question 62

Assume point A on a linear production possibilities curve represents the combination of 12 coffees and 3 cappuccinos, and point B represents 3 coffees and 6 cappuccinos.Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis.The opportunity cost of a cup of coffee is:

A)3 cappuccinos.
B)9 cappuccinos.
C)1/3 of a cappuccino.
D)6 cappuccinos.

Question 63

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

A)5 pizzas.
B)10 pizzas.
C)15 pizzas.
D)30 pizzas.

Question 64

Refer to the figure below.The opportunity cost of producing one bushel of wheat is:

A)2 bushels of corn.
B)½ of a bushel of corn.
C)1,000 bushels of corn.
D)500 bushels of corn.

Question 65

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. The opportunity cost of making a calculator for Smith is ______ and for Jones it is ______.

A)0.10 computers; 0.05 computers
B)10 computers; 20 computers
C)1 computer; 0.5 computers
D)0.6 computers; 1.2 computers

Question 66

If a given production combination is known to be attainable, then it:

A)must be on the production possibilities curve.
B)must be an inefficient point.
C)must be an efficient point.
D)could be either an inefficient or efficient point.

Question 67

Points that lie below the production possibilities curve are inefficient because:

A)more of one good could be produced without producing less of the other.
B)producing more of one good means producing less of the other.
C)producers face scarcity.
D)too many goods are being produceD.Inefficient points lie below the production possibilities curve, so it is possible to produce more of one good without producing less of the other.

Question 68

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators per hour, then Smith will ______ and Jones will ______.

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

Question 69

Earth Movers & Shakers operates 3 iron ore mines.The table below shows each mine's total daily production and the current number of miners at each mine.All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Suppose Earth Movers & Shakers needs to fill an order for 100 tons of ore in a single day.If it has no other orders to fill that day, and it's not possible to transfer miners from one mine to another, it should:

A)take it all from Mother Lode.
B)take 75 tons from Middle Drift and 25 tons from Mother Lode.
C)take 75 tons from Middle Drift and 25 tons from Scraping Bottom.
D)take 30 tons from Scraping Bottom and 70 tons from Mother Lode.

Question 70

Earth Movers & Shakers operates 3 iron ore mines.The table below shows each mine's total daily production and the current number of miners at each mine.All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Suppose Earth Movers & Shakers needs to fill an order for 60 tons of ore in a single day.If it has no other orders for that day, it should:

A)take it all from Mother Lode.
B)take it all from Middle Drift.
C)take 30 tons from Scraping Bottom and 30 tons from Middle Drift.
D)take 20 tons from each of the three mines.

Question 71

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. Suppose Smith and Jones begin by producing 16 computers and 0 calculators per hour.If they wish to produce 14 computers and 40 calculators per hour efficiently, then Smith should spend ______, and Jones should spend ______.

A)1 hour on computers; 40 minutes on computers and 20 minutes on calculators
B)1 hour on computers; 20 minutes on computers and 40 minutes on calculators
C)30 minutes on each; 30 minutes on each
D)45 minutes on computers and 15 on calculators; 1 hour on calculators

Question 72

Refer to the figure below.The opportunity cost of producing one bushel of corn is:

A)2 bushels of wheat.
B)½ of a bushel of wheat.
C)500 bushels of wheat.
D)250 bushels of wheat.

Question 73

Refer to the figure below.The opportunity cost of making an additional salad:

A)remains constant regardless of how many salads are made.
B)increases as the number of salads increases.
C)decreases as the number of pizzas decreases.
D)decreases as the number of salads increases.

Question 74

Refer to the figure below.Relative to point B, at point C this restaurant is:

A)making more pizzas and more salads.
B)making more pizzas and fewer salads.
C)making fewer pizzas and more salads.
D)operating more efficiently.

Question 75

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

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

Question 76

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

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 77

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. 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 ______.

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 78

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

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 79

Generally, on a linear two­good production possibilities curve, the opportunity cost of the good measured on the vertical axis is:

A)one minus the opportunity cost of the good measured on the horizontal axis.
B)the reciprocal of the opportunity cost of the good measured on the horizontal axis.
C)the absolute value of the slope of the production possibilities curve.
D)the negative of the opportunity cost of the good measured on the horizontal axis.

Question 80

Earth Movers & Shakers operates 3 iron ore mines.The table below shows each mine's total daily production and the current number of miners at each mine.All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. The opportunity cost of moving one miner from Scraping Bottom to another mine is:

A)0 tons per day.
B)3 tons per day.
C)4 tons per day.
D)5 tons per day.