Question 1

Suppose you have purchased a non­refundable plane ticket and, at the lastmoment, you cannot take the trip.You can, however, sell the ticket.If youpaid $700 for the ticket, the cost of sending the ticket to someone throughovernight mail is $20, and you spend $10 on a courier to get the ticket to thepost office for overnight delivery, what is the minimum you should acceptfor the ticket?

Accepted Answer

The answer of Suppose you have purchased a non­refundable plane...

Question 2

It is possible for one person to have a comparative advantage in theproduction of all products?

Accepted Answer

It is unlikely for one person to have a comparative advantage in the production of all products because it would require that person to be equally efficient and skilled in all fields of production. This is very rare as individuals tend to specialize in certain areas based on their skills and resources.

Question 3

A person who can produce more of a good than another person is said topossess a comparative advantage.

Accepted Answer

The answer of A person who can produce more of...

Question 4

Comparative advantage is

Accepted Answer

Comparative advantage refers to the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than some other individual, firm, or country. It is based on the concept of opportunity cost, which is the cost of forgoing one opportunity for another. Therefore, option C is the correct definition of comparative advantage.

Question 5

Melissa is a self­employed lawyer who chooses a higher­priced restaurant 2miles from home over a cheaper restaurant 15 miles from home.Which ofthe following is the most likely explanation for her behavior?

Accepted Answer

The higher opportunity cost of traveling to the cheaper restaurant (due to distance and time) offsets its lower monetary cost, making the closer, more expensive restaurant a better choice for her.

Question 6

A university should not disband its football team if it has already paid forthe stadium.

Accepted Answer

The answer of A university should not disband its football...

Question 7

Comparative advantage is based on opportunity costs.

Accepted Answer

Comparative advantage refers to the ability of a country or individual to produce a certain good or service at a lower opportunity cost than others. Opportunity cost refers to the value of the best alternative forgone when a particular choice is made. Therefore, comparative advantage is based on opportunity costs.

Question 8

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harrytakes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of thefollowing statements is correct?

Accepted Answer

The answer of John takes 10 minutes to iron a...

Question 9

If people specialize in producing those goods for which they possess acomparative advantage, then the economy as a whole can produce a greaterquantity of goods.

Accepted Answer

This is one of the core principles of international trade and is commonly referred to as the principle of comparative advantage. It holds that if individuals, firms or countries specialize in producing the goods and services for which they have a lower opportunity cost, then the overall output can be increased, resulting in a more efficient allocation of resources and higher levels of economic production.

Question 10

Sunk costs

Accepted Answer

The answer of Sunk costs
...

Question 11

The law of comparative advantage states that the person who shouldproduce a good is the person who

Accepted Answer

The law of comparative advantage states that the person who should produce a good is the person who has the lowest opportunity cost of producing that good. This means that the person can produce the good at a lower cost compared to others, giving them a comparative advantage in producing the good.

Question 12

It is impossible for one person to have a comparative advantage in all tasks.

Accepted Answer

As per the principle of comparative advantage, it is more likely for different people or countries to have a comparative advantage in different tasks based on their relative efficiency in producing different goods or services. Therefore, it is not possible for one person to have a comparative advantage in all tasks.

Question 13

It is possible for one person to have an absolute advantage in two tasks anda comparative advantage in only one.

Accepted Answer

Absolute advantage refers to the ability of one person to produce more of a product or service using the same amount of resources as another person. Comparative advantage, on the other hand, refers to the ability of one person to produce a product or service at a lower opportunity cost than another person. It is possible for one person to have an absolute advantage in two tasks (meaning they can produce more of both tasks), but only a comparative advantage in one of those tasks (meaning they have a lower opportunity cost in producing that task).

Question 14

It is possible for one person to have an absolute advantage in somethingeven if she has no comparative advantage in anything.

Accepted Answer

The answer of It is possible for one person to...

Question 15

If you and I agree to exchange four ginger snaps for one chocolate chipcookie, then it must be true that

Accepted Answer

Since we both agreed to the exchange, we must both believe that we are getting something of equal or greater value than what we are giving up. Therefore, we are both at least as well off as we were before the exchange.

Question 16

The opportunity cost of an activity is best measured

Accepted Answer

The opportunity cost of an activity is the value expected from the best alternative that is forgone. It is not only measured by the monetary costs or the time wasted choosing among various activities, but rather by the value of the next best option that was not chosen.

Question 17

The law of comparative advantage says that

Accepted Answer

The law of comparative advantage states that the individual with the lowest opportunity cost of producing a particular good should produce it. This means that although one individual may be able to produce both goods more efficiently than the other, they should still specialize in the good in which they have the lowest opportunity cost in order to maximize overall production and trade with the other individual for their specialized good.

Question 18

Absolute advantage is based on opportunity cost.

Accepted Answer

The answer of Absolute advantage is based on opportunity cost....

Question 19

The opportunity cost of a particular activity

Accepted Answer

The answer of The opportunity cost of a particular activity
...

Question 20

The law of comparative advantage says that a person should produce a goodif she

Accepted Answer

The law of comparative advantage states that a person should specialize in producing the good in which he or she has the lowest opportunity cost of production. In other words, the person should produce the good that they can produce at a lower cost compared to others. Therefore, answer B - has the lowest opportunity cost of producing that good - is the best choice.

Quiz 2: Economic Tools and Economics Systems

It is possible for one person to have a comparative advantage in theproduction of all products?

A person who can produce more of a good than another person is said topossess a comparative advantage.

Comparative advantage is

Melissa is a selfemployed lawyer who chooses a higherpriced restaurant 2miles from home over a cheaper restaurant 15 miles from home.Which ofthe following is the most likely explanation for her behavior?

A university should not disband its football team if it has already paid forthe stadium.

Comparative advantage is based on opportunity costs.

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harrytakes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of thefollowing statements is correct?

If people specialize in producing those goods for which they possess acomparative advantage, then the economy as a whole can produce a greaterquantity of goods.

Sunk costs

The law of comparative advantage states that the person who shouldproduce a good is the person who

It is impossible for one person to have a comparative advantage in all tasks.

It is possible for one person to have an absolute advantage in two tasks anda comparative advantage in only one.

It is possible for one person to have an absolute advantage in somethingeven if she has no comparative advantage in anything.

If you and I agree to exchange four ginger snaps for one chocolate chipcookie, then it must be true that

The opportunity cost of an activity is best measured

The law of comparative advantage says that

Absolute advantage is based on opportunity cost.

The opportunity cost of a particular activity

The law of comparative advantage says that a person should produce a goodif she

Quiz 2: Economic Tools and Economics Systems

It is possible for one person to have a comparative advantage in theproduction of all products?

A person who can produce more of a good than another person is said topossess a comparative advantage.

Comparative advantage is

Melissa is a self­employed lawyer who chooses a higher­priced restaurant 2miles from home over a cheaper restaurant 15 miles from home.Which ofthe following is the most likely explanation for her behavior?

A university should not disband its football team if it has already paid forthe stadium.

Comparative advantage is based on opportunity costs.

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harrytakes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of thefollowing statements is correct?

If people specialize in producing those goods for which they possess acomparative advantage, then the economy as a whole can produce a greaterquantity of goods.

Sunk costs

The law of comparative advantage states that the person who shouldproduce a good is the person who

It is impossible for one person to have a comparative advantage in all tasks.

It is possible for one person to have an absolute advantage in two tasks anda comparative advantage in only one.

It is possible for one person to have an absolute advantage in somethingeven if she has no comparative advantage in anything.

If you and I agree to exchange four ginger snaps for one chocolate chipcookie, then it must be true that

The opportunity cost of an activity is best measured

The law of comparative advantage says that

Absolute advantage is based on opportunity cost.

The opportunity cost of a particular activity

The law of comparative advantage says that a person should produce a goodif she

Melissa is a selfemployed lawyer who chooses a higherpriced restaurant 2miles from home over a cheaper restaurant 15 miles from home.Which ofthe following is the most likely explanation for her behavior?