Question 1

Suppose that,given the same number of workers,the United States can produce five times as many computers or 10 times as many airplanes as Mexico.Which of the following statements is true?

Accepted Answer

The United States can produce more of both computers and airplanes compared to Mexico, indicating an absolute advantage in both.

Question 2

If a country possesses the absolute advantage in the production of one good:

Accepted Answer

Possessing absolute advantage means that the country can produce more of a certain good given the same amount of resources compared to other countries. This does not necessarily mean that the country also has a comparative advantage in the production of that good or any other good. Therefore, choice D is the correct answer as it correctly identifies the benefit of possessing absolute advantage in the production of one good.

Question 3

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country B has the comparative advantage in the production of:

Accepted Answer

Country B has a comparative advantage in producing tablets because its opportunity cost of producing tablets is lower than that of Country A. In Country B, the opportunity cost of producing 1 tablet is 0.2 iPods (2 iPods/10 tablets), whereas in Country A, the opportunity cost of producing 1 tablet is 2 iPods (10 iPods/5 tablets).

Question 4

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country B,the trade-off to making one tomato is:

Accepted Answer

A worker in Country B can either make 18 bananas or 6 tomatoes each year. Therefore, the opportunity cost of making one tomato is the number of bananas that worker could have made instead.

To find this, we need to calculate the ratio of bananas to tomatoes for a worker in Country B:

- Bananas per tomato = 18/6 = 3

This means that for every tomato a worker in Country B makes, they give up the opportunity to make 3 bananas.

Therefore, the trade-off to making one tomato for a worker in Country B is 3 bananas.

So the answer is B) 3 bananas.

Question 5

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.When trade opens up,the United States should produce:

Accepted Answer

The United States has a comparative advantage in producing apples since they can produce 5 apples per pair of shoes while Canada can only produce 2 apples per pair of shoes. Therefore, the US should specialize in producing apples and trade with Canada for shoes. This will lead to gains from trade for both countries.

Question 6

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements can be said of Country A? Country A:

Accepted Answer

The answer of  Refer to the figure shown,which represents...

Question 7

Suppose that,given the same number of workers,the United States can produce two times as many TVs or 20 times as many potatoes as Chile.Which of the following statements is true?

Accepted Answer

The United States has an absolute advantage in producing both TVs and potatoes because it can produce more of both goods with the same number of workers compared to Chile.

Question 8

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 9

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.One of the reasons why Country A and Country B are not realistic representations of actual countries is:

Accepted Answer

The answer of  Refer to the figure shown,which represents...

Question 10

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true? The United States has an absolute advantage:

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 11

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true?

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 12

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country A,the trade-off of making one tomato is:

Accepted Answer

For a worker in Country A, the trade-off of making one tomato instead of bananas is 5 bananas (25 bananas / 5 tomatoes = 5 bananas per tomato).

Question 13

If the opportunity cost of producing corn is lower for Ohio than for Iowa,then:

Accepted Answer

The opportunity cost of producing corn is the value of the next best alternative foregone. If Ohio has a lower opportunity cost of producing corn than Iowa, it means that Ohio can produce corn at a lower cost (in terms of resources and inputs) than Iowa. Therefore, Ohio has the comparative advantage in corn production and should specialize in it. Iowa should focus on producing other goods or services that it can produce at a lower cost than Ohio.

Question 14

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.The opportunity cost for the United States is:

Accepted Answer

The opportunity cost for the United States of producing one pair of shoes is the number of apples that could have been produced instead. Since an American worker can produce 100 apples or 20 pairs of shoes, the opportunity cost of one pair of shoes is 100 apples / 20 pairs of shoes = 5 apples per pair of shoes.

Question 15

Suppose that only two goods are produced in an economy.If a country possesses the comparative advantage in the production of one good then it:

Accepted Answer

Just because a country has a comparative advantage in one good does not mean that it must have a comparative advantage in another good. Comparative advantage is determined by the opportunity cost of producing one good versus another, and this can vary depending on the country's resources and technology.

Question 16

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.The opportunity cost of one pair of shoes for the United States is _______,while the opportunity cost of one pair of shoes for Canada is _________.

Accepted Answer

The opportunity cost of one pair of shoes for the United States is 5 apples (100 apples/20 shoes), and for Canada, it is 2 apples (20 apples/10 shoes).

Question 17

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Suppose Country B's population of workers increased to 600.We can say:

Accepted Answer

Country B now possesses the absolute advantage in the production of both goods.

Question 18

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country A has the absolute advantage in the production of:

Accepted Answer

Country A can make more iPods and tablets than Country B with the same number of workers.

Question 19

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Country A has the comparative advantage in:

Accepted Answer

The answer of  Refer to the figure shown,which represents...

Question 20

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Assuming both countries have the same amount of resources available to them,which of the following statements is true? Country A has:

Accepted Answer

The answer of  Refer to the figure shown,which represents...

Quiz 2: Specialization and Exchange

Suppose that,given the same number of workers,the United States can produce five times as many computers or 10 times as many airplanes as Mexico.Which of the following statements is true?

If a country possesses the absolute advantage in the production of one good:

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country B has the comparative advantage in the production of:

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country B,the trade-off to making one tomato is:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.When trade opens up,the United States should produce:

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements can be said of Country A? Country A:

Suppose that,given the same number of workers,the United States can produce two times as many TVs or 20 times as many potatoes as Chile.Which of the following statements is true?

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true?

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.One of the reasons why Country A and Country B are not realistic representations of actual countries is:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true? The United States has an absolute advantage:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.Which of the following statements is true?

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year.Country A has 200 workers.Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year.Country B has 400 workers.For a worker in Country A,the trade-off of making one tomato is:

If the opportunity cost of producing corn is lower for Ohio than for Iowa,then:

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.On the other hand,a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day.The opportunity cost for the United States is:

Suppose that only two goods are produced in an economy.If a country possesses the comparative advantage in the production of one good then it:

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Suppose Country B's population of workers increased to 600.We can say:

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country A has the absolute advantage in the production of:

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Country A has the comparative advantage in:

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Assuming both countries have the same amount of resources available to them,which of the following statements is true? Country A has: