Question 1

Sunk costs

Accepted Answer

The answer of Sunk costs
...

Question 2

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

Accepted Answer

It is not possible for one person to have a comparative advantage in the production of all products because comparative advantage is based on the concept of opportunity cost, where one country or individual may have a lower opportunity cost in producing a certain good or service compared to another. Therefore, it is only possible to have a comparative advantage in the production of some products, but not all.

Question 3

The opportunity cost of an activity is best measured

Accepted Answer

The opportunity cost of an activity is the value expected from the next best alternative that is forgone. It is not just the monetary cost or the number of alternative activities forgone, but the cost difference between the chosen activity and the next best alternative. Therefore, option D is the best answer.

Question 4

The opportunity cost of a particular activity

Accepted Answer

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

Question 5

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

Accepted Answer

According to the principle of comparative advantage, individuals or countries specialize in the tasks in which they have a lower opportunity cost relative to others. This means that each person or country will have a comparative advantage in some tasks over others, but it is impossible for one person to have a comparative advantage in all tasks.

Question 6

If you enjoy playing golf, the opportunity cost of cleaning your room

Accepted Answer

The answer of If you enjoy playing golf, the opportunity...

Question 7

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

Accepted Answer

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

Question 8

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

Accepted Answer

The answer of If you and I agree to exchange...

Question 9

Comparative advantage is based on opportunity costs.

Accepted Answer

Comparative advantage is the ability of a country or individual to produce a particular good or service at a lower opportunity cost than another country or individual. Opportunity cost is the cost of forgoing the next best alternative when making a decision. Therefore, comparative advantage is based on opportunity costs.

Question 10

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

Accepted Answer

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

Question 11

Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home. Which of the following is the most likely explanation for her behavior?

Accepted Answer

The answer of Melissa is a self-employed lawyer who chooses...

Question 12

The term opportunity cost suggests that

Accepted Answer

The term opportunity cost refers to the fact that resources are limited and choosing one option means giving up the benefits of another. It is about making choices and understanding the potential benefits and drawbacks of each option. Therefore, option E is the correct choice as it accurately describes the concept of opportunity cost.

Question 13

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

Accepted Answer

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

Question 14

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

Accepted Answer

This is known as the principle of comparative advantage, which states that individuals, businesses, and countries should specialize in producing the goods or services that they can produce at a lower opportunity cost than others, and trade with others for goods that they have a higher opportunity cost for producing. This leads to increased efficiency and productivity, and ultimately results in a larger overall quantity of goods being produced.

Question 15

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

Accepted Answer

The law of comparative advantage states that a person should produce a good if they have the lowest opportunity cost of producing that good. Opportunity cost refers to the potential loss of other alternatives when one alternative is chosen. Therefore, the person who has the lowest opportunity cost of producing a good should specialize in that good and trade with others who specialize in other goods to maximize overall production and efficiency.

Question 16

The law of comparative advantage states that the person who should produce 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 if a person can produce a good at a lower opportunity cost than someone else, they should specialize in producing that good and trade with the person who has a higher opportunity cost in producing the same good. By doing so, both parties can benefit from the trade.

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 specialize in producing that good and trade with other individuals for goods they have a higher opportunity cost in producing. This enables all parties to benefit from trade by producing the goods they have a comparative advantage in. Option B, C, D, and E contain incorrect statements about comparative advantage.

Question 18

Suppose you have purchased a non-refundable plane ticket and, at the last moment, you cannot take the trip. You can, however, sell the ticket. If you paid $700 for the ticket, the cost of sending the ticket to someone through overnight mail is $20, and you spend $10 on a courier to get the ticket to the post office for overnight delivery, what is the minimum you should accept for the ticket?

Accepted Answer

The answer of Suppose you have purchased a non-refundable plane...

Question 19

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

Accepted Answer

Absolute advantage means being able to produce more of a good or service than someone else in the same amount of time or using the same amount of resources. Comparative advantage means being able to produce a good or service at a lower opportunity cost than someone else. It is possible for someone to have a higher productivity (absolute advantage) in two tasks but have a lower opportunity cost (comparative advantage) in only one task.

Question 20

Comparative advantage is

Accepted Answer

Comparative advantage refers to the ability of an individual or a country to produce a good at a lower opportunity cost than some other individual or country. This means that when individuals or countries specialize in producing the goods in which they have a comparative advantage and trade with others, they can both gain from the exchange and increase overall economic welfare.

Quiz 2: Economic Tools and Economics Systems