Question 1

Becky's opportunity cost of producing one gun is
A) 20 hours.
B) 4 hours.
C) 20 units of butter.
D) 15 units of butter.
E) 5 units of butter.

Accepted Answer

The answer of Becky's opportunity cost of producing one gun...

Question 2

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following:
 
-For Alex,the opportunity cost of cleaning one room is ________ meal(s);for Lou the opportunity cost of cleaning one room is _________ meal(s).
A) 1;4/5
B) 1;5/4
C) 1.5;2.5
D) 5/3;4/3
E) 3;5

Accepted Answer

For Alex, the opportunity cost of cleaning one room is the number of meals that he could have prepared in the same amount of time it takes him to clean one room. In one hour, Alex could prepare 3 meals (according to the information given in the table) while Lou could prepare 4.8 meals. Therefore, the opportunity cost of cleaning one room for Alex is 3 meals, while for Lou it is 4.8 meals. Simplifying the fractions, the closest answer choice is A, in which the opportunity cost of cleaning one room is 1 meal for Alex and 4/5 of a meal for Lou.

Question 3

Yolanda can produce 2 dresses or 4 shirts in 8 hours of work,while Sandra can produce 3 dresses or 7 shirts in the same amount of time.Yolanda has a(n):
A) absolute advantage in producing dresses and shirts,and a comparative advantage in producing dresses,while Sandra has a comparative advantage in producing shirts.
B) comparative advantage in producing shirts,while Sandra has an absolute advantage in producing dresses and shirts,and a comparative advantage in producing dresses.
C) comparative advantage in producing dresses,while Sandra has an absolute advantage in producing dresses and shirts,and a comparative advantage in producing shirts.
D) absolute advantage in producing dresses and shirts,and a comparative advantage in producing shirts,while Sandra has a comparative advantage in producing dresses.
E) absolute advantage and a comparative advantage in producing dresses and shirts.

Accepted Answer

Yolanda has a comparative advantage in producing dresses because she can produce 2 dresses in the same amount of time that Sandra can produce 3 dresses. On the other hand, Sandra has an absolute advantage in producing dresses and shirts because she can produce more of both items in the same amount of time than Yolanda. Sandra also has a comparative advantage in producing shirts because she can produce 7 shirts in the same amount of time that Yolanda can produce only 4 shirts. Therefore, the best choice is C as it accurately describes the scenario.

Question 4

Point F is __________ while point G is __________.
A) unattainable;inefficient
B) inefficient;unattainable
C) inefficient;inefficient
D) efficient;inefficient
E) efficient;unattainable

Accepted Answer

Point F is inefficient because it represents a level of production that is below the economy's production possibilities frontier, meaning resources are not being fully utilized. Point G is unattainable because it lies outside the production possibilities frontier, indicating that the economy cannot produce at that level with the current resources and technology.

Question 5

The slope of any production possibilities curve is __________ because __________.
A) negative;production of one of the two goods is always insufficient
B) negative;to produce more of one good means less production of the other
C) constant;the trade-off in production never changes
D) positive;to produce more of one good means more production of the other
E) positive;to produce more of one good means less production of the other

Accepted Answer

The slope of the production possibilities curve represents the opportunity cost of producing one good in terms of the other. Therefore, to produce more of one good means sacrificing the production of the other, resulting in a negative slope.

Question 6

When each individual concentrates on performing the tasks and producing the goods for which she or he has the lowest opportunity cost,they are producing in accordance with the Principle of
A) Increasing Opportunity Cost.
B) Decreasing Opportunity Cost.
C) Comparative Advantage.
D) Scarcity.
E) Low-Hanging Fruit.

Accepted Answer

The principle described in the question is referring to comparative advantage. This principle asserts that individuals or countries should specialize in producing the goods or services that they can produce at a lower opportunity cost than others, and therefore trade with others to obtain other goods or services they need but cannot produce as efficiently. By doing so, the overall production and welfare of all parties involved is maximized.

Question 7

Of the labelled points,______________ are attainable.
A) F and G
B) B,C,and D
C) A,C,and E
D) A,B,C,D,E,and F
E) A,B,C,D,and E

Accepted Answer

The answer of Of the labelled points,______________ are attainable.
A) F...

Question 8

The reason a family doctor would send one of his patients to a surgeon to remove a tumour is because the surgeon has
A) an absolute advantage in providing treatment.
B) a comparative advantage in providing treatment due to inborn talent and training.
C) a comparative advantage in providing treatment due to cultural differences.
D) an arrangement with the family doctor to share the fees for unnecessary surgeries.
E) a better bedside manner.

Accepted Answer

The surgeon has a comparative advantage in providing treatment due to inborn talent and training. Surgeons have received specialized training and education that enables them to perform surgical procedures, such as tumor removal, more effectively and efficiently than a family doctor who has not undergone such training. This comparative advantage makes it more efficient for the family doctor to refer the patient to the specialist, resulting in better outcomes for the patient.

Question 9

Having a comparative advantage in a particular task means that you
A) are better at it than other people.
B) give up more to accomplish that task than do others.
C) give up less to accomplish that task than do others.
D) have specialized in that task,while others have not
E) have more resources than others.

Accepted Answer

Having a comparative advantage in a particular task means that you give up less to accomplish that task than do others. This is because you are more efficient in that task, and therefore can produce more with the same resources than others could. This allows you to specialize in that task and trade with others who have a comparative advantage in other areas.

Question 10

Point G is a(n)__________ point in relation to the production possibilities curve.
A) attainable
B) efficient
C) unattainable
D) inefficient
E) inefficient and attainable

Accepted Answer

Point G is considered unattainable if it lies outside the production possibilities curve, indicating that the resources available are insufficient to produce that combination of goods.

Question 11

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following:
 
-Alex and Lou have worked out an efficient arrangement.Under that arrangement,
A) Alex and Lou each spend a half hour on cooking and a half hour on cleaning.
B) Alex spends all of his time on cleaning,while Lou does all the cooking.
C) Lou does all of the cleaning and half of the cooking.
D) Lou spends all of his time on cleaning,while Alex does all the cooking
E) Lou does all of the cooking and half of the cleaning.

Accepted Answer

The answer of Lou and Alex live together and share...

Question 12

Jane can produce 50 pizzas or 100 hamburgers per day,while Sam can produce 30 pizzas or 90 hamburgers per day.Jane has an absolute advantage in the production of
A) pizzas,but not hamburgers,and has a comparative advantage in the production of pizzas.
B) hamburgers,but not pizzas,and has a comparative advantage in the production of hamburgers.
C) hamburgers and pizzas,as well as a comparative advantage in the production of hamburgers.
D) hamburgers and pizzas,as well as a comparative advantage in the production of pizzas.
E) hamburgers and pizzas,as well as a comparative advantage in the production of hamburgers and pizzas.

Accepted Answer

Jane has an absolute advantage in both pizzas (50 vs 30) and hamburgers (100 vs 90). She has a comparative advantage in pizzas because her opportunity cost for pizzas (2 hamburgers per pizza) is lower than Sam's (3 hamburgers per pizza).

Question 13

The production possibilities curve shows
A) the relationship between inputs and output.
B) the minimum amount of one good that can be produced for every possible production level of the other good.
C) a positive relationship.
D) the maximum production of one good for every possible production level of the other good.
E) how increasing the production of one good allows production of the other good to also increasE.

Accepted Answer

The production possibilities curve shows the maximum production of one good for every possible production level of the other good. This is because resources are scarce and can only be allocated in a certain way, limiting the maximum amount that can be produced of each good. The curve is a graphical representation of the production possibilities frontier, which shows the different combinations of two goods that can be produced with the available resources and technology.

Question 14

The slope of the production possibilities curve must be
A) constant.
B) positive.
C) decreasing.
D) increasing.
E) negativE.

Accepted Answer

The slope of the production possibilities curve represents the opportunity cost of producing one good in terms of the other. Since resources are not equally efficient in producing both goods, the opportunity cost increases as more of a good is produced. This results in a downward-sloping curve, indicating a negative slope.

Question 15

Of the labelled points,______________ are efficient.
A) F and G
B) B,C,and D
C) A,C,and E
D) A,B,C,D,E,and F
E) A,B,C,D,and E

Accepted Answer

A,B,C,D,and E are efficient because they are all on the production possibilities frontier (PPF).

Question 16

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 termed a(n)
A) production possibilities curve.
B) consumption possibilities curve.
C) production impossibilities curve.
D) comparative advantage curve.
E) absolute advantage curvE.

Accepted Answer

A production possibilities curve (PPC) is a graphical representation of the maximum amount or combinations of two goods that can be produced with the given resources and technology. It shows the tradeoffs between producing one good over another and illustrates the concept of opportunity cost. Therefore, the correct option is A) production possibilities curve.

Question 17

-The absolute advantage for electric guitars belongs to __________;for acoustic guitars,it belongs to __________.
A) Mark;Dennis
B) Mark;Glenn
C) Glenn;Dennis
D) Dennis;Mark
E) Dennis;Glenn

Accepted Answer

Mark has the absolute advantage in electric guitars, and Dennis has the absolute advantage in acoustic guitars.

Question 18

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following:
 
-Which of the following is true?
A) Lou has both an absolute and comparative advantage over Alex in both tasks.
B) Alex has both an absolute and comparative advantage over Lou in both tasks.
C) Alex has a comparative advantage over Lou in cleaning.
D) Lou has a comparative advantage over Alex in cleaning.
E) Neither Alex nor Lou has a comparative advantagE.

Accepted Answer

In order to determine comparative advantage, we need to look at the opportunity cost of the tasks. Opportunity cost is the value of the next best alternative forgone.

For cooking meals ahead, we know that Lou can cook 2 meals or clean the house in 1 hour. So the opportunity cost of cooking for Lou is cleaning the house for 2 meals per hour. For Alex, the opportunity cost of cooking is cleaning the house for 1 meal per hour. Therefore, Lou has a lower opportunity cost for cooking meals ahead and has a comparative advantage in this task.

For cleaning, we know that Alex can clean the house in 1 hour or cook 1 meal. So the opportunity cost of cleaning for Alex is cooking 1 meal per hour. For Lou, the opportunity cost of cleaning is cooking 0.5 meals per hour. Therefore, Lou has a lower opportunity cost for cleaning and has a comparative advantage in this task.

Therefore, the correct answer is D, Lou has a comparative advantage over Alex in cleaning.

Question 19

-The opportunity cost of an extra acoustic guitar for Mark is
A) 0.0625 fewer electric guitars.
B) 8 fewer electric guitars.
C) 16 fewer electric guitars.
D) 20 fewer electric guitars.
E) 30 fewer electric guitars.

Accepted Answer

The answer of 
-The opportunity cost of an extra acoustic...

Question 20

-The opportunity cost of an extra acoustic guitar for Glenn is
A) 0.8 fewer electric guitars.
B) 7 fewer electric guitars.
C) 0.14 more electric guitars.
D) equal to Glenn's opportunity cost of an extra electric guitar.
E) 8 fewer electric guitars.

Accepted Answer

The answer of 
-The opportunity cost of an extra acoustic...

Quiz 2: Measuring Macroeconomic Performance: Saving and Wealth

Becky's opportunity cost of producing one gun is

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following: -For Alex,the opportunity cost of cleaning one room is meal(s) ;for Lou the opportunity cost of cleaning one room is _ meal(s) .

Yolanda can produce 2 dresses or 4 shirts in 8 hours of work,while Sandra can produce 3 dresses or 7 shirts in the same amount of time.Yolanda has a(n) :

Point F is while point G is .

The slope of any production possibilities curve is because .

When each individual concentrates on performing the tasks and producing the goods for which she or he has the lowest opportunity cost,they are producing in accordance with the Principle of

Of the labelled points,______________ are attainable.

The reason a family doctor would send one of his patients to a surgeon to remove a tumour is because the surgeon has

Having a comparative advantage in a particular task means that you

Point G is a(n) __________ point in relation to the production possibilities curve.

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following: -Alex and Lou have worked out an efficient arrangement.Under that arrangement,

Jane can produce 50 pizzas or 100 hamburgers per day,while Sam can produce 30 pizzas or 90 hamburgers per day.Jane has an absolute advantage in the production of

The production possibilities curve shows

The slope of the production possibilities curve must be

Of the labelled points,______________ are efficient.

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 termed a(n)

-The absolute advantage for electric guitars belongs to ;for acoustic guitars,it belongs to .

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following: -Which of the following is true?

-The opportunity cost of an extra acoustic guitar for Mark is

-The opportunity cost of an extra acoustic guitar for Glenn is