Question 1

Table 3-1&#10;  &#10;Refer to Table 3-1. Which of the following is correct?&#10;A)The Farmer has an absolute advantage in meat, and the Rancher has an absolute advantage in potatoes.&#10;B)The Farmer has an absolute advantage in potatoes, and the Rancher has an absolute advantage in meat.&#10;C)The Farmer has an absolute advantage in meat, and the Rancher has an absolute advantage in meat.&#10;D)The Farmer has an absolute advantage in neither good, and the Rancher has an absolute advantage in both goods.

Accepted Answer

The Farmer can produce 20 potatoes or 10 units of meat in an hour, while the Rancher can produce 5 potatoes or 25 units of meat in an hour. Therefore, the Farmer has an absolute advantage in potatoes (can produce more potatoes in an hour than the Rancher) and the Rancher has an absolute advantage in meat (can produce more meat in an hour than the Farmer).

Question 2

A rancher can produce only hamburgers, while a farmer can produce only French fries. If the rancher and the farmer like both foods, which of the following is most likely?&#10;A)They cannot gain from trade.&#10;B)They could gain from trade under certain circumstances, but not always.&#10;C)They could gain from trade because each would enjoy a greater variety of food.&#10;D)They could gain from trade only if each were indifferent between hamburgers and French fries.

Accepted Answer

Since the rancher and farmer like both foods, they could gain from trade because each would enjoy a greater variety of food. The rancher can trade some of his hamburgers with the farmer in exchange for some of his French fries, and both can have a meal that's more enjoyable than what they could have produced on their own.

Question 3

Table 3-1&#10;  &#10;Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the Farmer?&#10;A)8 hours of labour.&#10;B)2 hours of labour.&#10;C)4 kg of meat.&#10;D)1/4 kg of meat.

Accepted Answer

The opportunity cost of 1 kg of potatoes for the Farmer is 1/4 kg of meat, as it represents the amount of meat the Farmer foregoes to produce an additional kg of potatoes.

Question 4

Table 3-1&#10;  &#10;Refer to Table 3-1. What is the opportunity cost of 1 pound of meat for the Farmer?&#10;A)1/4 hour of labour.&#10;B)4 hours of labour.&#10;C)4 kg of potatoes.&#10;D)1/4 kg of potatoes.

Accepted Answer

The opportunity cost of 1 pound of meat for the Farmer is the amount of potatoes he could have produced instead. If the Farmer can produce 4 kg of potatoes in the same time it takes to produce 1 pound of meat, then the opportunity cost is 4 kg of potatoes.

Question 5

If there is trade, which of the following is most likely?&#10;A)A country is worse off because it becomes dependent on other countries.&#10;B)A country will produce a greater variety of goods and services to trade.&#10;C)A country's consumption possibilities frontier can be outside its production possibilities frontier.&#10;D)A country will experience a lower unemployment rate.

Accepted Answer

Trade allows a country to consume more than it can produce on its own, effectively shifting its consumption possibilities frontier outward, beyond its production possibilities frontier. This is because trade enables countries to specialize in the production of goods and services in which they have a comparative advantage, and then trade for other goods and services they need or want, thus potentially consuming more or a greater variety of goods and services than they could produce on their own.

Question 6

If labour in Mexico is less productive than labour in the United States in all areas of production, which of the following is correct?&#10;A)Neither nation can benefit from trade.&#10;B)Mexico can benefit from trade but the United States cannot.&#10;C)Mexico will not have a comparative advantage in any good.&#10;D)Both nations can benefit from trade.

Accepted Answer

Even if labour in Mexico is less productive than labour in the United States, there may still be opportunities for both nations to benefit from trade. For example, Mexico may have a comparative advantage in producing certain goods that the United States does not, and can trade those goods to the United States in exchange for products that it cannot produce as efficiently. Specialization and trade can lead to greater efficiency and higher overall production for both nations. Therefore, option D is the correct choice.

Question 7

What is the difference between production possibilities frontiers that are bowed out and those that are linear?&#10;A)Bowed out production possibilities frontiers illustrate tradeoffs where linear production possibilities frontiers do not.&#10;B)Bowed out production possibilities frontiers show increasing opportunity cost where linear ones show constant opportunity cost.&#10;C)Bowed out production possibilities frontiers are the result of perfectly shiftable resources where linear production possibilities frontiers are not.&#10;D)Linear production possibilities frontiers illustrate real world conditions more than bowed out production possibilities frontiers.

Accepted Answer

Bowed out production possibilities frontiers show increasing opportunity cost where linear ones show constant opportunity cost. This means that as we produce more of one good, we have to give up increasingly larger amounts of the other good. Linear production possibilities frontiers do not show this relationship, as the opportunity cost remains constant regardless of how much of either good is produced.

Question 8

Which of the following is NOT correct?&#10;A)Trade allows for specialization.&#10;B)Trade is good for nations.&#10;C)Trade is based on absolute advantage.&#10;D)Trade allows individuals to consume outside of their individual production possibilities curve.

Accepted Answer

Trade can be based on comparative advantage, where each country specializes in producing the goods where they have the lowest opportunity cost, rather than absolute advantage which is based on who can produce a good with less input.

Question 9

Table 3-2&#10;  &#10;Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the Farmer?&#10;A)1/4 hour of labour.&#10;B)4 hours of labour.&#10;C)4 kilograms of potatoes.&#10;D)1/4 kilogram of potatoes.

Accepted Answer

According to Table 3-2, the Farmer can produce either 4 kilograms of potatoes or 1 kilogram of meat with 1 hour of labour. Therefore, the opportunity cost of 1 kilogram of meat for the Farmer is 4 kilograms of potatoes (since that's the alternative they would have to give up to produce 1 kilogram of meat). Thus, the best choice is option C, which correctly identifies the opportunity cost of 1 kilogram of meat for the Farmer.

Question 10

When will a production possibilities frontier be linear and not bowed out?&#10;A)If no tradeoffs exist.&#10;B)If the tradeoff between the two goods is always at a constant rate.&#10;C)If unemployment is zero.&#10;D)If resources are allocated efficiently.

Accepted Answer

A production possibilities frontier is bowed out when the opportunity cost of producing one good increases as more of it is produced. This happens when resources are not suited equally well for both goods. If the tradeoff between the two goods is always at a constant rate, the production possibilities frontier will be linear, indicating that resources are equally suited for the production of both goods.

Question 11

When can a country's consumption possibilities frontier be outside its production possibilities frontier?&#10;A)If additional resources become available.&#10;B)If there is an increase in the level of technology.&#10;C)If the country engages in trade.&#10;D)If resources are shiftable.

Accepted Answer

The answer of When can a country's consumption possibilities frontier...

Question 12

Table 3-1&#10;  &#10;Refer to Table 3-1. What is the opportunity cost of 1 kg of meat for the Rancher?&#10;A)4 hours of labour.&#10;B)5 hours of labour.&#10;C)5/4 kg of potatoes.&#10;D)4/5 kg of potatoes.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 13

Table 3-1&#10;  &#10;Refer to Table 3-1. Which of the following is correct?&#10;A)The Rancher has a comparative advantage in neither good, and the Farmer has a comparative advantage in both goods.&#10;B)The Rancher has a comparative advantage in both goods, and the Farmer has a comparative advantage in neither good.&#10;C)The Rancher has a comparative advantage in meat, and the Farmer has a comparative advantage in potatoes.&#10;D)The Rancher has a comparative advantage in potatoes, and the Farmer has a comparative advantage in meat.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 14

Table 3-1&#10;  &#10;Refer to Table 3-1. Which of the following is correct?&#10;A)The Rancher has an absolute advantage in both goods, and the Rancher has a comparative advantage in meat.&#10;B)The Rancher has an absolute advantage in meat, and the Rancher has a comparative advantage in potatoes.&#10;C)The Rancher has an absolute advantage in meat, and the Rancher has a comparative advantage in neither good.&#10;D)The Rancher has an absolute advantage in both goods, and the Rancher has a comparative advantage in potatoes.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 15

What is the best reason for people to provide you with goods and services?&#10;A)They are acting out of generosity.&#10;B)They are acting because they like you.&#10;C)They do so because they get something in return.&#10;D)They are required to do so by government.

Accepted Answer

The answer of What is the best reason for people...

Question 16

Regan grows flowers and makes vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. In this case, who could benefit from trade?&#10;A)Both Jayson and Regan.&#10;B)Jayson, but not Regan.&#10;C)Regan, but not Jayson.&#10;D)Neither Jayson nor Regan.

Accepted Answer

The answer of Regan grows flowers and makes vases. Jayson...

Question 17

Table 3-1&#10;  &#10;Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the Rancher?&#10;A)4 hours of labour.&#10;B)5 hours of labour.&#10;C)5/4 kg of meat.&#10;D)4/5 kg of meat.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 18

Table 3-1&#10;  &#10;Refer to Table 3-1. Which of the following is correct?&#10;A)The Farmer has an absolute advantage in potatoes, and the Rancher has a comparative advantage in meat.&#10;B)The Farmer has an absolute advantage in meat, and the Rancher has a comparative advantage in potatoes.&#10;C)The Farmer has an absolute advantage in neither good, and the Rancher has a comparative advantage in potatoes.&#10;D)The Farmer has an absolute advantage in neither good, and the Rancher has a comparative advantage in meat.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 19

Table 3-1&#10;  &#10;Refer to Table 3-1. How could the Farmer and Rancher both benefit?&#10;A)By the Farmer specializing in meat and the Rancher specializing in potatoes.&#10;B)By the Farmer specializing in potatoes and the Rancher specializing in meat.&#10;C)By the Farmer specializing in neither good and the Rancher specializing in both goods.&#10;D)They cannot benefit by specialization and trade.

Accepted Answer

The answer of Table 3-1&#10;  &#10;Refer to Table 3-1....

Question 20

If there is no trade, which of the following is most likely?&#10;A)A country is better off because it will become self-sufficient.&#10;B)A country's production possibilities frontier is also its consumption possibilities frontier.&#10;C)A country can still benefit from international specialization.&#10;D)More product variety is available in a country.

Accepted Answer

The answer of If there is no trade, which of...

Question 21

Figure 3-1  &#10;Refer to Figure 3-1. Assume that Cliff and Paul were both producing wheat and corn, and each was dividing their time equally between the two. Then they decide to specialize in the product they have a comparative advantage in. What would happen to the total production of corn?&#10;A)Increase by 1 bushel.&#10;B)Increase by 3 bushels.&#10;C)Increase by 5 bushels.&#10;D)Decrease by 2 bushels.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 22

Table 3-2&#10;  &#10;Refer to Table 3-62. Which of the following is correct?&#10;A)The Farmer has an absolute advantage in meat, and the Rancher has an absolute advantage in potatoes.&#10;B)The Farmer has an absolute advantage in potatoes, and the Rancher has an absolute advantage in meat.&#10;C)The Farmer has an absolute advantage in neither good, and the Rancher has an absolute advantage in both goods.&#10;D)The Farmer has an absolute advantage in potatoes, and the Rancher has an absolute advantage in neither good.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-62....

Question 23

Figure 3-1  &#10;Refer to Figure 3-1. If Paul divides his time equally between corn and wheat, what will he be able to produce?&#10;A)2 bushels of wheat and 2 bushels of corn.&#10;B)3 bushels of wheat and 3 bushels of corn.&#10;C)4 bushels of wheat and 5 bushels of corn.&#10;D)4 bushels of wheat and 6 bushels of corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 24

Table 3-2&#10;  &#10;Refer to Table 3-2. What is the opportunity cost of 1 kilogram of potatoes for the Rancher?&#10;A)4 hours of labour.&#10;B)5 hours of labour.&#10;C)5/4 pounds of meat.&#10;D)4/5 pound of meat.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 25

Figure 3-1  &#10;Refer to Figure 3-1. What is the opportunity cost of 1 bushel of wheat for Cliff?&#10;A)1/3 bushel of corn.&#10;B)2/3 bushel of corn.&#10;C)1 bushel of corn.&#10;D)3/2 bushels of corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 26

Figure 3-2    &#10;Refer to Figure 3-2. Assume that both Paul and Cliff divide their time equally between the production of corn and wheat, and they do not trade. If they were the only producers of corn and wheat, what would the total production of wheat and corn be?&#10;A)7 bushels of wheat and 8 bushels of corn.&#10;B)8 bushels of wheat and 7 bushels of corn.&#10;C)9 bushels of wheat and 6 bushels of corn.&#10;D)18 bushels of wheat and 12 bushels of corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 27

Table 3-2&#10;  &#10;Refer to Table 3-2. Which of the following is correct?&#10;A)The Rancher has a comparative advantage in neither good, and the Farmer has a comparative advantage in both goods.&#10;B)The Rancher has a comparative advantage in both goods, and the Farmer has a comparative advantage in neither good.&#10;C)The Rancher has a comparative advantage in meat, and the Farmer has a comparative advantage in potatoes.&#10;D)The Rancher has a comparative advantage in potatoes, and the Farmer has a comparative advantage in meat.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 28

Table 3-2&#10;  &#10;Refer to Table 3-2. How could the Farmer and Rancher both benefit?&#10;A)By the Farmer specializing in meat and the Rancher specializing in potatoes.&#10;B)By the Farmer specializing in potatoes and the Rancher specializing in meat.&#10;C)By the Farmer specializing in neither good and the Rancher specializing in both goods.&#10;D)They cannot benefit by specialization and trade.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 29

Figure 3-2    &#10;Refer to Figure 3-2. What is the opportunity cost of 1 bushel of wheat for Cliff?&#10;A)1/4 bushel of corn.&#10;B)1/2 bushel of corn.&#10;C)1 bushel of corn.&#10;D)4 bushels of corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 30

Figure 3-1  &#10;Refer to Figure 3-1. Which of the following is true for Cliff and Paul?&#10;A)Paul has an absolute advantage in both wheat and corn.&#10;B)Paul has an absolute advantage in wheat and Cliff has an absolute advantage in corn.&#10;C)Cliff has an absolute advantage in wheat and Paul has an absolute advantage in corn.&#10;D)Cliff has an absolute advantage in both wheat and corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 31

Figure 3-2    &#10;Refer to Figure 3-2. If Paul divides his time equally between corn and wheat, what will he be able to produce?&#10;A)4 bushels of wheat and 1 bushel of corn.&#10;B)4 bushels of wheat and 5 bushels of corn.&#10;C)5 bushels of wheat and 4 bushels of corn.&#10;D)5 bushels of wheat and 5 bushels of corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 32

Table 3-2&#10;  &#10;Refer to Table 3-2. Which of the following is correct?&#10;A)The Rancher has an absolute advantage in both goods, and the Farmer has a comparative advantage in meat.&#10;B)The Rancher has an absolute advantage in meat, and the Farmer has a comparative advantage in potatoes.&#10;C)The Rancher has an absolute advantage in meat, and the Farmer has a comparative advantage in neither good.&#10;D)The Rancher has an absolute advantage in neither good, and the Farmer has a comparative advantage in potatoes.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 33

Table 3-2&#10;  &#10;Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the Rancher?&#10;A)4 hours of labour.&#10;B)5 hours of labour.&#10;C)5/4 kilograms of potatoes.&#10;D)4/5 kilogram of potatoes.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 34

Figure 3-2    &#10;Refer to Figure 3-2. Assume that Cliff and Paul were both producing wheat and corn, and both were dividing their time equally between the two. Then they decide to specialize in the product for which they have a comparative advantage. What would happen to the production of corn?&#10;A)Increase by 1 bushel.&#10;B)Increase by 2 bushels.&#10;C)Increase by 3 bushels.&#10;D)Increase by 4 bushels.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 35

Figure 3-1  &#10;Refer to Figure 3-1. Assume that both Paul and Cliff divide their time equally between the production of corn and wheat, and they do not trade. If they were the only producers of corn and wheat, what would the total production of wheat and corn be?&#10;A)8 bushels of wheat and 7 bushels of corn.&#10;B)7 bushels of wheat and 6 bushels of corn.&#10;C)6 bushels of wheat and 8 bushels of corn.&#10;D)7 bushels of wheat and 7 bushels of corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 36

Table 3-2&#10;  &#10;Refer to Table 3-2. What is the opportunity cost of 1 kilogram of potatoes for the Farmer?&#10;A)8 hours of labour.&#10;B)2 hours of labour.&#10;C)4 kilograms of meat.&#10;D)1/4 kilogram of meat.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 37

Figure 3-1  &#10;Refer to Figure 3-1. Which of the following is true for Cliff and Paul?&#10;A)Paul has a comparative advantage in both wheat and corn.&#10;B)Paul has a comparative advantage in wheat and Cliff has a comparative advantage in corn.&#10;C)Cliff has a comparative advantage in wheat and Paul has a comparative advantage in corn.&#10;D)Cliff has a comparative advantage in both wheat and corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 38

Table 3-2&#10;  &#10;Refer to Table 3-2. Which of the following is correct?&#10;A)The Farmer has an absolute advantage in neither good, and the Rancher has a comparative advantage in meat.&#10;B)The Farmer has an absolute advantage in meat, and the Rancher has a comparative advantage in potatoes.&#10;C)The Farmer has an absolute advantage in potatoes, and the Rancher has a comparative advantage in meat.&#10;D)The Farmer has an absolute advantage in neither good, and the Rancher has a comparative advantage in potatoes.

Accepted Answer

The answer of Table 3-2&#10;  &#10;Refer to Table 3-2....

Question 39

Figure 3-1  &#10;Refer to Figure 3-1. Assume that Cliff and Paul were both producing wheat and corn, and each was dividing their time equally between the two. Then they decide to specialize in the product they have a comparative advantage in and trade 3 bushels of wheat for 3 bushels of corn. What would Cliff now be able to consume?&#10;A)4 bushels of wheat and 3 bushels of corn.&#10;B)3 bushels of wheat and 4 bushels of corn.&#10;C)3 bushels of wheat and 3 bushels of corn.&#10;D)2 bushels of wheat and 3 bushels of corn.

Accepted Answer

The answer of Figure 3-1  &#10;Refer to Figure 3-1....

Question 40

Figure 3-2    &#10;Refer to Figure 3-2. Assume that Cliff and Paul were both producing wheat and corn, and both were dividing their time equally between the two. Then they decide to specialize in the product for which they have a comparative advantage and trade 3 bushels of wheat for 3 bushels of corn. What would Cliff now be able to consume?&#10;A)5 bushels of wheat and 3 bushels of corn.&#10;B)4 bushels of wheat and 3 bushels of corn.&#10;C)3 bushels of wheat and 5 bushels of corn.&#10;D)3 bushels of wheat and 3 bushels of corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 41

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Which of the following is correct?&#10;A)Ben has a comparative advantage in ice cream and Jerry has an absolute advantage in both goods.&#10;B)Ben has a comparative advantage in cones and Jerry has an absolute advantage in ice cream.&#10;C)Ben has a comparative advantage in ice cream and Jerry has an absolute advantage in neither good.&#10;D)Ben has a comparative advantage in ice cream and Jerry has an absolute advantage in cones.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 42

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. For Jerry, what is the opportunity cost of 1 pound of ice cream?&#10;A)3/2 kg of cones.&#10;B)1/3 kg of cones.&#10;C)1 kg of cones.&#10;D)2 kg of cones.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 43

Figure 3-4    &#10;Refer to Figure 3-4. For Ben, what is the opportunity cost of 1 bottle of wine?&#10;A)1/4 bottle of beer.&#10;B)1/2 bottle of beer.&#10;C)2 bottles of beer.&#10;D)4 bottles of beer.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 44

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Which of the following is correct?&#10;A)Ben has an absolute advantage in cones and Jerry has a comparative advantage in ice cream.&#10;B)Ben has an absolute advantage in both goods and Jerry has a comparative advantage in cones.&#10;C)Ben has an absolute advantage in ice cream and Jerry has a comparative advantage in cones.&#10;D)Ben has an absolute advantage in neither good and Jerry has a comparative advantage in ice cream.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 45

Figure 3-4    &#10;Refer to Figure 3-4. Which of the following is correct?&#10;A)Ben has an absolute advantage in wine, and Jerry has an absolute advantage in neither good.&#10;B)Ben has an absolute advantage in beer, and Jerry has an absolute advantage in wine.&#10;C)Ben has an absolute advantage in wine, and Jerry has an absolute advantage in beer.&#10;D)Ben has an absolute advantage in neither good, and Jerry has an absolute advantage in both goods.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 46

Figure 3-4    &#10;Refer to Figure 3-4. For Jerry, what is the opportunity cost of 1 bottle of wine?&#10;A)1 bottle of beer.&#10;B)1/2 bottle of beer.&#10;C)1/3 bottle of beer.&#10;D)3 bottles of beer.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 47

Figure 3-2    &#10;Refer to Figure 3-2. Which of the following is true for Cliff and Paul?&#10;A)Paul has an absolute advantage in both wheat and corn.&#10;B)Paul has an absolute advantage in wheat and Cliff has an absolute advantage in corn.&#10;C)Cliff has an absolute advantage in wheat and Paul has an absolute advantage in corn.&#10;D)Cliff has an absolute advantage in both wheat and corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 48

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. For Ben, what is the opportunity cost of 1 kg of ice cream?&#10;A)1/4 kg of cones.&#10;B)1/2 kg of cones.&#10;C)2 kg of cones.&#10;D)4 kg of cones.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 49

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. For Ben, what is the opportunity cost of 1 kg of cones?&#10;A)2 kg of ice cream.&#10;B)1/2 kg of ice cream.&#10;C)4 kg of ice cream.&#10;D)1/4 kg of ice cream.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 50

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. For Jerry, what is the opportunity cost of 1 kg of cones?&#10;A)2/3 kg of ice cream.&#10;B)3 kg of ice cream.&#10;C)1 kg of ice cream.&#10;D)2 kg of ice cream.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 51

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Which of the following is correct?&#10;A)Ben has a comparative advantage in cones and Jerry has a comparative advantage in ice cream.&#10;B)Ben has a comparative advantage in ice cream and Jerry has a comparative advantage in cones.&#10;C)Ben has a comparative advantage in neither good and Jerry has a comparative advantage in both goods.&#10;D)Ben has a comparative advantage in both goods and Jerry has a comparative advantage in neither good.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 52

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Which of the following is correct?&#10;A)Ben has an absolute advantage in ice cream and Jerry has an absolute advantage in cones.&#10;B)Ben has an absolute advantage in cones and Jerry has an absolute advantage in ice cream.&#10;C)Ben has an absolute advantage in neither good and Jerry has an absolute advantage in both goods.&#10;D)Ben has an absolute advantage in both goods and Jerry has an absolute advantage in neither good.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 53

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Ben and Jerry were currently both producing at point A on their production possibilities frontier and then Ben decided he would be willing to trade 4 pounds of cones to get 2 pounds of ice cream from Jerry. If both decided to specialize in what they had a comparative advantage in and trade, what would be the gains from trade?&#10;A)1 pound of cones for Ben and 1 pound of ice cream for Jerry.&#10;B)1 pound of ice cream for Ben and 1 pound of cones for Jerry.&#10;C)2 pounds of ice cream for Ben and 2 pounds of cones for Jerry.&#10;D)2 pounds of ice cream for Ben and 1 pound of cones for Jerry.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 54

Figure 3-4    &#10;Refer to Figure 3-4. Which of the following is correct?&#10;A)Ben has a comparative advantage in wine, and Jerry has an absolute advantage in both goods.&#10;B)Ben has a comparative advantage in beer, and Jerry has an absolute advantage in both goods.&#10;C)Ben has a comparative advantage in beer, and Jerry has an absolute advantage in wine.&#10;D)Ben has a comparative advantage in wine, and Jerry has an absolute advantage in beer.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 55

Figure 3-4    &#10;Refer to Figure 3-4. For Ben, the opportunity cost of 1 bottle of beer is&#10;A)1/2 bottle of wine.&#10;B)1/4 bottle of wine.&#10;C)2 bottles of wine.&#10;D)4 bottles of wine.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 56

Figure 3-4    &#10;Refer to Figure 3-4. Which of the following is correct?&#10;A)Ben has an absolute advantage in wine, and Jerry has a comparative advantage in neither good.&#10;B)Ben has an absolute advantage in both goods, and Jerry has a comparative advantage in beer.&#10;C)Ben has an absolute advantage in wine, and Jerry has a comparative advantage in beer.&#10;D)Ben has an absolute advantage in beer, and Jerry has a comparative advantage in wine.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 57

Figure 3-3&#10;Ice cream is measured in kilograms.  &#10;Refer to Figure 3-3. Suppose that Ben and Jerry have both decided to produce at point A on their production possibilities frontiers. What do we know?&#10;A)This is not an efficient combination for either Ben or Jerry.&#10;B)Ben and Jerry are both allocating 1/2 their time to the production of each good.&#10;C)no other production point is as efficient for both Ben and Jerry to produce as point A.&#10;D)Both should always attempt to produce an equal number of cones and ice cream.

Accepted Answer

The answer of Figure 3-3&#10;Ice cream is measured in kilograms....

Question 58

Figure 3-4    &#10;Refer to Figure 3-4. Which of the following is correct?&#10;A)Ben has a comparative advantage in beer, and Jerry has a comparative advantage in wine.&#10;B)Ben has a comparative advantage in wine, and Jerry has a comparative advantage in beer.&#10;C)Ben has a comparative advantage in neither good, and Jerry has a comparative advantage in wine.&#10;D)Ben has a comparative advantage in both goods, and Jerry has a comparative advantage in neither.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 59

Figure 3-2    &#10;Refer to Figure 3-2. Which of the following is true for Cliff and Paul?&#10;A)Paul has a comparative advantage in both wheat and corn.&#10;B)Paul has an absolute advantage in wheat and Cliff has a comparative advantage in corn.&#10;C)Cliff has a comparative advantage in wheat and Paul has a comparative advantage in corn.&#10;D)Cliff has a comparative advantage in both wheat and corn.

Accepted Answer

The answer of Figure 3-2    &#10;Refer to...

Question 60

Figure 3-4    &#10;Refer to Figure 3-4. For Jerry, what is the opportunity cost of 1 bottle of beer?&#10;A)1 bottle of wine.&#10;B)1/2 bottle of wine.&#10;C)1/3 bottle of wine.&#10;D)3 bottles of wine.

Accepted Answer

The answer of Figure 3-4    &#10;Refer to...

Question 61

Table 3-3&#10;  &#10;Refer to Table 3-3. What is the opportunity cost of 1 quilt for Carolyn?&#10;A)2 dresses.&#10;B)3 dresses.&#10;C)4 dresses.&#10;D)5 dresses.

Accepted Answer

The answer of Table 3-3&#10;  &#10;Refer to Table 3-3....

Question 62

Table 3-3&#10;  &#10;Refer to Table 3-3. Which of the following is correct?&#10;A)Helen has a comparative advantage in dresses and Carolyn has a comparative advantage in quilts.&#10;B)Helen has a comparative advantage in quilts and Carolyn has a comparative advantage in dresses.&#10;C)Helen has a comparative advantage in neither good and Carolyn has a comparative advantage in both goods.&#10;D)Helen has a comparative advantage in both goods and Carolyn has a comparative advantage in neither good.

Accepted Answer

The answer of Table 3-3&#10;  &#10;Refer to Table 3-3....

Question 63

Figure 3-5  &#10;Refer to Figure 3-5. What is the opportunity cost of 1 pair of tap shoes for Ginger?&#10;A)1/4 pair of ballet slippers.&#10;B)1/3 pair of ballet slippers.&#10;C)3/4 pair of ballet slippers.&#10;D)4/3 pairs of ballet slippers.

Accepted Answer

The answer of Figure 3-5  &#10;Refer to Figure 3-5....

Question 64

Table 3-3&#10;  &#10;Refer to Table 3-3. What is the opportunity cost of 1 dress for Helen?&#10;A)1 quilt.&#10;B)1/2 quilt.&#10;C)1/4 quilt.&#10;D)4 quilts.

Accepted Answer

The answer of Table 3-3&#10;  &#10;Refer to Table 3-3....

Deck 3: Interdependence and the Gains From Trade