Question 1

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight-hour day, Rolfe can produce either 8 loaves of bread or 8 kilograms of butter.
Based on the information above, the opportunity cost of producing 1 loaf of bread is

Accepted Answer

To calculate the opportunity cost of producing 1 loaf of bread we need to see what each person gives up in terms of butter production. For Andy, he can either produce 24 loaves of bread or 8 kilograms of butter in 8 hours. Therefore, to produce 1 loaf of bread, Andy gives up producing 1/3 kilogram of butter (8 kg ÷ 24 loaves = 1/3 kg). For Rolfe, he can either produce 8 loaves of bread or 8 kilograms of butter in 8 hours. Therefore, to produce 1 loaf of bread, Rolfe gives up producing 1 kilogram of butter (8 kg ÷ 8 loaves = 1 kg). Therefore, the opportunity cost of producing 1 loaf of bread is 1/3 kilogram of butter for Andy and 1 kilogram of butter for Rolfe, which can be found in choice B.

Question 2

On a graph of a production possibilities frontier (PPF), possible combinations of outputs are represented by

Accepted Answer

The answer of On a graph of a production possibilities...

Question 3

Specializing and trading makes us all better off.

Accepted Answer

Specializing and trading allows individuals and countries to produce goods or services in which they have a comparative advantage, leading to increased efficiency and productivity. This results in lower costs, increased availability of goods and services, and ultimately leads to higher standards of living for all.

Question 4

On a graph of a production possibilities frontier (PPF), opportunity cost is measured by

Accepted Answer

The slope of the PPF represents the rate at which one good must be given up in order to produce more of the other. This is the opportunity cost of producing more of one good given a fixed amount of resources. Thus, the answer is D.

Question 5

On a graph of a production possibilities frontier (PPF), impossible combinations of outputs are represented by

Accepted Answer

Points outside the PPF represent combinations of outputs that are impossible to produce with the given resources and technology. Points inside the PPF are attainable, but inefficient, while points on the PPF represent efficient use of resources to produce a combination of outputs. The slope of the PPF represents the opportunity cost of producing one output in terms of the other output, and does not indicate impossible combinations.

Question 6

Specializing and trading makes us dependent on others.

Accepted Answer

When we specialize in a particular skill or area of work and trade with others, we become dependent on them for goods or services that we are not capable of producing ourselves. This creates interdependence among individuals and nations in the global economy.

Question 7

Specializing and trading makes each of us less able to support ourselves compared to Canadian pioneers.

Accepted Answer

Specializing and trading allows us to produce more goods and services than we could if we were each trying to produce everything we needed ourselves. This means that we can trade with others for the goods and services that we don't produce ourselves, which makes us more able to support ourselves than we would be if we were trying to be self-sufficient.

Question 8

To gain from comparative advantage, countries must trade, and must

Accepted Answer

To gain from comparative advantage, countries must specialize in producing the goods and services that they can produce at a lower opportunity cost than other countries. This specialization leads to an increase in efficiency and productivity, allowing countries to trade their surplus goods with other countries for goods that they cannot produce as efficiently. Saving, investing, doing research and development, and adding capital equipment can all be helpful in increasing a country's overall production potential, but they are not necessarily required for gaining from comparative advantage.

Question 9

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight-hour day, Rolfe can produce either 24 loaves of bread or 24 kilograms of butter.
Based on the information above, which statement is true?

Accepted Answer

Andy has a lower opportunity cost for producing bread compared to butter, making him more efficient in bread production relative to Rolfe. This gives Andy a comparative advantage in producing bread.

Question 10

Figure 1.3.2
Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves
  
-According to Figure 1.3.2,

Accepted Answer

The answer of Figure 1.3.2
Monthly Production Possibilities for a Country...

Question 11

Mexico and Canada produce both oil and apples using labour only. A barrel of oil can be produced with 8 hours of labour in Mexico and 4 hours of labour in Canada. A bushel of apples can be produced with 12 hours of labour in Mexico and 8 hours of labour in Canada. Mexico has

Accepted Answer

The answer of Mexico and Canada produce both oil and...

Question 12

Tova and Ron are the only two people on the planet Melmac. It takes Tova 3 hours to produce a widget and 3 hours to produce a woggle.
It takes Ron 1 hour to produce a widget and 2 hours to produce a woggle.
Based on the information above, Tova and Ron

Accepted Answer

Tova has an absolute advantage in neither widget nor woggle production since it takes her the same amount of time to produce each. However, Ron has a comparative advantage in producing widgets since he can produce one in one hour while it takes Tova three hours. Likewise, Tova has a comparative advantage in producing woggles since she can produce one in three hours while it takes Ron two hours. Therefore, both Tova and Ron can gain from trade if Tova specializes in producing woggles and Ron specializes in producing widgets.

Question 13

On a graph of a production possibilities frontier (PPF), maximum combinations of outputs are represented by

Accepted Answer

The production possibilities frontier (PPF) represents the maximum combinations of outputs that an economy can produce with its given resources and technology. Therefore, the points on the PPF represent the maximum combinations of two goods that an economy can produce, given its resources and technology. Points inside the PPF are inefficient and points outside the PPF are unattainable with the given resources and technology. The slope of the PPF represents the opportunity cost of producing one good in terms of the other.

Question 14

Figure 1.3.2
Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves
  
-According to Figure 1.3.2,

Accepted Answer

The answer of Figure 1.3.2
Monthly Production Possibilities for a Country...

Question 15

Canada and Chile produce both oil and apples using labour only. A barrel of oil can be produced with 4 hours of labour in Canada and 8 hours of labour in Chile. A bushel of apples can be produced with 8 hours of labour in Canada and 12 hours of labour in Chile. Chile has

Accepted Answer

The answer of Canada and Chile produce both oil and...

Question 16

Figure 1.3.2
Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves
  
-In Figure 1.3.2, moving from possibility b to possibility c, the opportunity cost of producing one additional maple leaf is

Accepted Answer

The answer of Figure 1.3.2
Monthly Production Possibilities for a Country...

Question 17

Figure 1.3.2
Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves
  
-In Figure 1.3.2, moving from possibility c to possibility b, the opportunity cost of producing one additional hockey stick is

Accepted Answer

Moving from possibility c to possibility b involves producing one more hockey stick at the expense of 3 maple leaves, which is the definition of opportunity cost in this context.

Question 18

If Ying can increase production of houses without decreasing production of any other product, then Ying

Accepted Answer

Ying producing more houses without decreasing production of any other product indicates that he is not utilizing all available resources efficiently, which means he is operating inside his production possibilities frontier (PPF). The PPF represents the maximum possible output combinations of two or more products given a set of inputs; producing inside the PPF suggests that there are still resources that can be utilized to increase production without sacrificing the output of another product.

Question 19

In Portugal, the opportunity cost of a bale of wool is 3 bottles of wine. In England, the opportunity cost of 1 bottle of wine is 3 bales of wool. Based on this information,

Accepted Answer

According to the information given, the opportunity cost of producing one bale of wool in Portugal is 3 bottles of wine, while in England, the opportunity cost of producing one bottle of wine is 3 bales of wool. Therefore, Portugal has a comparative advantage in producing wine, as it has a lower opportunity cost of producing it in terms of giving up the production of wool. England, on the other hand, has a comparative advantage in producing wool, as it has a lower opportunity cost of producing it in terms of giving up the production of wine. Therefore, trade can occur, with Portugal exporting wine to England and England exporting wool to Portugal, both countries benefiting from specializing in the production of and exporting the good they have a comparative advantage in.

Question 20

If Ying must decrease production of some other product to increase his production of houses, then Ying

Accepted Answer

Ying must decrease production of another product to increase house production because he is operating on his production possibilities frontier (PPF), indicating that resources are fully utilized and any increase in the production of one good requires a decrease in the production of another.

Quiz 1: Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight-hour day, Rolfe can produce either 8 loaves of bread or 8 kilograms of butter. Based on the information above, the opportunity cost of producing 1 loaf of bread is

On a graph of a production possibilities frontier (PPF) , possible combinations of outputs are represented by

Specializing and trading makes us all better off.

On a graph of a production possibilities frontier (PPF) , opportunity cost is measured by

On a graph of a production possibilities frontier (PPF) , impossible combinations of outputs are represented by

Specializing and trading makes us dependent on others.

Specializing and trading makes each of us less able to support ourselves compared to Canadian pioneers.

To gain from comparative advantage, countries must trade, and must

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 kilograms of butter. In an eight-hour day, Rolfe can produce either 24 loaves of bread or 24 kilograms of butter. Based on the information above, which statement is true?

Figure 1.3.2 Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves -According to Figure 1.3.2,

Mexico and Canada produce both oil and apples using labour only. A barrel of oil can be produced with 8 hours of labour in Mexico and 4 hours of labour in Canada. A bushel of apples can be produced with 12 hours of labour in Mexico and 8 hours of labour in Canada. Mexico has

Tova and Ron are the only two people on the planet Melmac. It takes Tova 3 hours to produce a widget and 3 hours to produce a woggle. It takes Ron 1 hour to produce a widget and 2 hours to produce a woggle. Based on the information above, Tova and Ron

On a graph of a production possibilities frontier (PPF) , maximum combinations of outputs are represented by

Figure 1.3.2 Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves -According to Figure 1.3.2,

Canada and Chile produce both oil and apples using labour only. A barrel of oil can be produced with 4 hours of labour in Canada and 8 hours of labour in Chile. A bushel of apples can be produced with 8 hours of labour in Canada and 12 hours of labour in Chile. Chile has

Figure 1.3.2 Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves -In Figure 1.3.2, moving from possibility b to possibility c, the opportunity cost of producing one additional maple leaf is

Figure 1.3.2 Monthly Production Possibilities for a Country Producing Only Hockey Sticks and Maple Leaves -In Figure 1.3.2, moving from possibility c to possibility b, the opportunity cost of producing one additional hockey stick is

If Ying can increase production of houses without decreasing production of any other product, then Ying

In Portugal, the opportunity cost of a bale of wool is 3 bottles of wine. In England, the opportunity cost of 1 bottle of wine is 3 bales of wool. Based on this information,

If Ying must decrease production of some other product to increase his production of houses, then Ying