Question 1

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

Accepted Answer

If Korea has the option to produce either shoes or soccer balls, then it has a comparative advantage in one product over the other. The opportunity cost of shoes is the inverse of the opportunity cost of soccer balls. Therefore, Korea should focus on producing the product with a lower opportunity cost and trade with another country for the other product. This will enable both countries to benefit from trade.

Question 2

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 chair is

Accepted Answer

To find the opportunity cost of 1 chair, we need to compare the amount of tables each woodworker can make in exchange for 1 chair.

For Mike, the opportunity cost of 1 chair is 1/4 table (since he can make 4 tables or 20 chairs in one month).

For Sandy, the opportunity cost of 1 chair is 1/6 table (since she can make 6 tables or 18 chairs in one month).

Therefore, the answer is A because the opportunity cost of 1 chair is 1/5 table for Mike and 1/3 table for Sandy.

Question 3

The producer that requires a smaller quantity of inputs to produce a certain amount of a good,relative to the quantities of inputs required by other producers to produce the same amount of that good,

Accepted Answer

An absolute advantage exists when a producer requires fewer inputs to produce a given amount of a good compared to other producers. This concept focuses on the efficiency in the use of inputs, not on the opportunity cost or the exclusivity of production.

Question 4

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

The opportunity cost is the value of the next best alternative that must be given up in order to obtain something else. In this case, the gardener must give up 14 bushels of corn to get 5 bushels of green beans. Therefore, the opportunity cost of 1 bushel of green beans is 14/5, or 2.8 bushels of corn. Choice B is the correct answer.

Question 5

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.If the production possibilities frontier shown is for 240 hours of production,then how long does it take Bonovia to make one pound of cheese?

Accepted Answer

The slope of the production possibilities frontier represents the opportunity cost of producing one good in terms of the other. In this case, the slope of the frontier is -2/3, meaning that for every 2/3 pound of cheese produced, 1 pound of ham must be foregone. Therefore, to produce one pound of cheese, the opportunity cost is 3/2 pounds of ham, or 3/2 hours of production time (since the production capacity is 240 hours per month). Dividing 3/2 by the pounds of cheese produced per hour (which is the reciprocal of the slope) gives: 3/2 divided by 2/3 = 3/2 x 3/2 = 9/4 = 2.25 hours, or 3/4 hour.

Question 6

Suppose a gardener produces both green beans and corn in her garden.If the opportunity cost of one bushel of corn is 3/5 bushel of green beans,then the opportunity cost of 1 bushel of green beans is

Accepted Answer

The answer of Suppose a gardener produces both green beans...

Question 7

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 table is

Accepted Answer

The answer of Mike and Sandy are two woodworkers who...

Question 8

If Shawn can produce more donuts in one day than Sue can produce in one day,then

Accepted Answer

Shawn producing more donuts in one day than Sue means Shawn has an absolute advantage in the production of donuts, as absolute advantage refers to the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group. Comparative advantage, on the other hand, involves the ability to produce a good at a lower opportunity cost, which is not determined by the information given.

Question 9

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

Accepted Answer

The answer of Travis can mow a lawn in two...

Question 10

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. 
-Assume for the United States that the opportunity cost of each airplane is 100 cars.Which of these pairs of points could be on the United States' production possibilities frontier?

Accepted Answer

The answer of Figure 3-11
The graph below represents the various...

Question 11

The opportunity cost of an item is

Accepted Answer

The opportunity cost of an item is what you give up to get that item. It's the value of the next best alternative that must be forgone in order to pursue a certain action.

Question 12

A farmer has the ability to grow either corn or cotton or some combination of the two.Given no other information,it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

Accepted Answer

Opportunity cost is the value forgone of the best alternative that must be sacrificed in order to undertake a certain action. Given that the farmer can only grow corn, cotton, or some combination of the two, the opportunity cost of a bushel of corn is the amount of cotton he could have grown instead, and vice versa. The same goes for any combination he chooses to grow. Therefore, the opportunity cost of a bushel of corn multiplied by the opportunity cost of a bushel of cotton is equal to 1, since there is always an alternative use of resources for the farmer.

Question 13

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

Accepted Answer

Since the farmer sacrifices 1.5 watermelons for each cantaloupe, his opportunity cost of one watermelon is 2/3 of a cantaloupe. This means that for every watermelon he produces, he is giving up the opportunity to produce 2/3 of a cantaloupe. Therefore, option C is the correct answer.

Question 14

Absolute advantage is found by comparing different producers'

Accepted Answer

Absolute advantage is determined by the input requirements per unit of output, meaning which producer requires fewer resources or inputs to produce the same amount of output. Comparing the opportunity costs considers the trade-off of producing one good over another and does not necessarily reflect absolute advantage. Payments to land, labor, and capital are simply expenses incurred in production and do not necessarily determine efficiency. Locational and logistical circumstances may affect production costs, but again do not necessarily determine efficiency or resource requirements.

Question 15

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.If the production possibilities frontier shown is for 240 hours of production,then which of the following combinations of ham and cheese could Bonovia produce in 240 hours?

Accepted Answer

The answer of Figure 3-11
The graph below represents the various...

Question 16

Suppose Susan can wash three windows per hour or she can iron six shirts per hour.Paul can wash two windows per hour or he can iron five shirts per hour.

Accepted Answer

The answer of Suppose Susan can wash three windows per...

Question 17

Assume for Namibia that the opportunity cost of each hut is 200 bowls.Which of these pairs of points could be on Namibia's production possibilities frontier?

Accepted Answer

The answer of Assume for Namibia that the opportunity cost...

Question 18

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,while Sandy can make 6 tables or 18 chairs.Given this,we know that

Accepted Answer

The answer of Mike and Sandy are two woodworkers who...

Question 19

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.If the production possibilities frontier shown is for 240 hours of production,then which of the following combinations of ham and cheese could Bonovia not produce in 240 hours?

Accepted Answer

The answer of Figure 3-11
The graph below represents the various...

Question 20

What must be given up to obtain an item is called

Accepted Answer

Opportunity cost refers to the potential benefits that are missed out on when choosing one option over another. It is what someone has to give up in order to make one choice over another. Option A, out-of-pocket cost, only refers to the actual monetary cost of obtaining an item. Option B, comparative worth, is a value judgment and does not necessarily refer to the cost of obtaining the item. Option D, absolute value, refers to the magnitude or size of something and is not related to the cost of obtaining an item. Therefore, the best choice is C) opportunity cost.

Quiz 3: Interdependence and the Gains From Trade

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 chair is

The producer that requires a smaller quantity of inputs to produce a certain amount of a good,relative to the quantities of inputs required by other producers to produce the same amount of that good,

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

Suppose a gardener produces both green beans and corn in her garden.If the opportunity cost of one bushel of corn is 3/5 bushel of green beans,then the opportunity cost of 1 bushel of green beans is

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 table is

If Shawn can produce more donuts in one day than Sue can produce in one day,then

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

The opportunity cost of an item is

A farmer has the ability to grow either corn or cotton or some combination of the two.Given no other information,it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

Absolute advantage is found by comparing different producers'

Suppose Susan can wash three windows per hour or she can iron six shirts per hour.Paul can wash two windows per hour or he can iron five shirts per hour.

Assume for Namibia that the opportunity cost of each hut is 200 bowls.Which of these pairs of points could be on Namibia's production possibilities frontier?

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,while Sandy can make 6 tables or 18 chairs.Given this,we know that

What must be given up to obtain an item is called