Deck 2: Specialization and Exchange

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?

A)The United States has an absolute advantage in the production of computers,and Mexico has an absolute advantage in the production of airplanes.
B)The United States has an absolute advantage in the production of airplanes,and Mexico has an absolute advantage in the production of computers.
C)The United States has an absolute advantage in the production of both airplanes and computers.
D)Mexico has an absolute advantage in the production of both airplanes and computers.

Answer 1

The United States has an absolute advantage in the production of both airplanes and computers.

Question 2

Trade:

A)involves a winner and a loser.
B)often hurts both parties in the long run.
C)is a zero sum proposition.
D)can benefit both parties.

Answer 2

can benefit both parties.

Question 3

A more realistic production possibilities curve:

A)is more convex than one assuming constant opportunity costs.
B)is more convex than one assuming increasing opportunity costs.
C)is more concave than one assuming constant opportunity costs.
D)is straighter than one assuming constant opportunity costs.

Answer 3

is more concave than one assuming constant opportunity costs.

Question 4

The concept of the invisible hand was first introduced to economics by:

A)David Ricardo.
B)Adam Smith.
C)Thomas Malthus.
D)Milton Friedman.

Question 5

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?

A)Chile should trade with the United States for potatoes because the United States has an absolute advantage in the production of potatoes.
B)Chile should trade with the United States for TVs because the United States has an absolute advantage in the production of potatoes.
C)The United States can benefit from trading TVs but not potatoes with Chile.
D)None of these statements is necessarily true.

Question 6

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

A)then it must also possess the absolute advantage in the production of the other good.
B)then it must also possess the comparative advantage in the production of that good.
C)then it must also possess the comparative advantage in the production of the other good.
D)it can produce more of that good given the same resources.

Question 7

Choosing to produce at any point within a production possibilities frontier:

A)is inefficient,meaning the society would not be using all its available resources in their best possible use.
B)is efficient,meaning the society would be using all its available resources in their best possible use.
C)is unobtainable,meaning the society cannot produce that combination of goods.
D)is efficient,meaning the society would be using all its available resources,though not in their best use.

Question 8

If we consider the reality that each worker has different skills,then the production possibilities frontier:

A)would display a constant opportunity cost of a good as more of that good is produced.
B)would display a decreasing opportunity cost of a good as more of that good is produced.
C)would display an increasing opportunity cost of a good as more of that good is produced.
D)cannot be drawn,as too many variables would need to be taken into consideration.

Question 9

The invisible hand refers to:

A)the coordination that occurs from everyone working in their own self-interest.
B)the coordination that occurs from a government agency finding efficiencies.
C)the coordination that occurs from everyone working for the overall good of society.
D)the coordination that occurs from a government coordinating economic activity.

Question 10

A production possibilities frontier is a line or curve that:

A)shows all the possible combinations of outputs that can be produced using all available resources.
B)shows what can be produced when all available resources are efficiently used.
C)shows the best combinations of outputs that can be produced using all available resources.
D)explains why societies make the choices they do.

Question 11

The concepts of specialization and gains from trade explain:

A)international trade.
B)why globalization has expanded recently.
C)consumer decisions.
D)both international trade and the choices individuals make.

Question 12

Trade:

A)only benefits the stronger nation.
B)only benefits the weaker nation.
C)can benefit everyone involved.
D)can only benefit one party of the trade,but we cannot say which without more information.

Question 13

An increase in productivity as a result of a new technology would cause the production possibilities frontier to:

A)shift in.
B)shift out.
C)not move until society chose to move it.
D)become more meaningful in policy decisions.

Question 14

Trade:

A)increases total production,which can benefit everyone involved.
B)increases total production,which benefits only the more wealthy nation.
C)decreases total production across nations,but increases it for some.
D)decreases total production across nations,but benefits everyone because they are individually more productive.

Question 15

The production possibilities frontier:

A)can show all possible combinations of goods,but not tell us which society should choose.
B)can show all possible combinations of goods,and which society should choose.
C)cannot show all possible combinations of goods because society is typically inefficient.
D)can show us which possible combinations of goods society should choose,but cannot tell us which points will be inefficient.

Question 16

If a wealthy nation like the United States trades with a poorer,less developed nation like Cambodia,then it is likely true that:

A)the United States is taking advantage of Cambodia and is the only beneficiary to the trade.
B)Cambodia is pressured to enter trade and not benefiting at all.
C)both the United States and Cambodia can benefit from trading.
D)the United States is being charitable and not benefiting from the trade at all.

Question 17

Hurricane Katrina destroyed much of New Orleans and other parts of the South.Which of the following statements is true?

A)The hurricane caused the production possibilities frontier of the United States to shift in.
B)The hurricane caused the production possibilities to increase,since it created a lot of work to rebuild the city and surrounding areas.
C)The hurricane caused the production possibilities frontier of the United States to shift out.
D)None of these statements is true.

Question 18

The slope of a production possibilities frontier measures:

A)the opportunity cost of producing one good in terms of the other.
B)the trade-off inherent in the production of one good versus the other.
C)how much of one good that must be given up in order to produce the other.
D)All of these statements are true.

Question 19

If we consider the reality that each worker has different skills,then the production possibilities frontier:

A)would have a convex shape.
B)would have a concave shape.
C)would be a straight line.
D)would shift outward.

Question 20

If society were to experience an increase in its available resources:

A)its production possibilities frontier would shift out.
B)its production possibilities frontier would shift in.
C)its production possibilities frontier would not move,but society could change its production choice.
D)its production possibilities frontier would become convex.

Question 21

When a producer has the ability to produce a good or service at a lower opportunity cost than others,economists say the producer:

A)has an absolute advantage at producing that good.
B)has a comparative advantage at producing that good.
C)has no reason to trade with others.
D)is efficient.

Question 22

When a producer has a comparative advantage at producing a good,it means the producer:

A)can produce more of that good than others with the same number of workers.
B)has the ability to produce a good or service at a lower opportunity cost than others.
C)has no reason to trade with others.
D)is efficient.

Question 23

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.The opportunity cost of one pair of gloves is:

A)6 radishes for the United States and 2 radishes for Bangladesh.
B)60 radishes for the United States and 20 radishes for Bangladesh.
C)1/6 radishes for the United States and ½ radishes for Bangladesh.
D)6,000 radishes for the United States and 2,000 radishes for Bangladesh.

Question 24

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Using the concepts of advantage and trade,we can say that:

A)the opportunity cost of one pair of gloves is lower for the United States than Bangladesh,therefore the United States has a comparative advantage in glove production.
B)the opportunity cost of one pair of gloves is higher for the United States than Bangladesh,therefore the United States has a comparative advantage in radish production.
C)the opportunity cost of one pair of gloves is the same for both the United States and Bangladesh,therefore no comparative advantage exists.
D)the opportunity cost of one pair of gloves is the same for both the United States and Bangladesh,therefore they both have the comparative advantage in glove production.

Question 25

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.A Canadian worker,on the other hand,can produce 10 pairs of shoes or grow 20 apples per day.Canada has the ____________ opportunity cost of a pair of shoes than the United States,so: ____________.

A)higher;Canada should specialize in shoe production
B)lower;Canada should specialize in apple production
C)higher;Canada should specialize in apple production
D)lower;Canada should specialize in shoe production

Question 26

Suppose an American worker can make 100 chairs or catch 1,000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.Which of the following statements is true?

A)The United States has the comparative advantage in chair production.
B)Chile has the comparative advantage in chair production.
C)Both the United States and Chile have a comparative advantage in chair production.
D)Neither the United States nor Chile has a comparative advantage in chair production.

Question 27

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.A Canadian worker,on the other hand,can produce 10 pairs of shoes or grow 20 apples per day.The opportunity cost of a pair of shoes is __________ for the United States than Canada,so Canada has the ______________ advantage in shoe production.

A)higher;comparative
B)lower;comparative
C)higher;absolute
D)lower;absolute

Question 28

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

A)2 apples for each pair of shoes.
B)2 pairs of shoes for each apple.
C)½ apple for each pair of shoes.
D)½ pair of shoes for every 2 apples.

Question 29

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Using the concept of absolute advantage,which of the following statements is true?

A)The United States has the absolute advantage in the production of both gloves and radishes.
B)The United States does not have the absolute advantage in the production of either gloves or radishes.
C)The United States has the absolute advantage in the production of gloves,but not radishes.
D)The United States has the absolute advantage in the production of radishes,but not gloves.

Question 30

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

A)The United States has a comparative advantage in the production of shoes.
B)Canada has a comparative advantage in the production of shoes.
C)Comparative advantage doesn't exist in this scenario.
D)Both countries have a comparative advantage in the production of shoes.

Question 31

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Using the concepts of absolute and comparative advantage,we can say that:

A)the United States has the comparative advantage in the production of both gloves and radishes.
B)the United States has the comparative advantage in neither the production of gloves nor radishes.
C)the United States has the comparative advantage in the production of gloves only.
D)the United States has the comparative advantage in the production of radishes only.

Question 32

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

A)The United States has the absolute advantage in the production of both shoes and apples.
B)Canada has the absolute advantage in the production of both shoes and apples.
C)The United States has the absolute advantage in the production of shoes and Canada has the absolute advantage in the production of apples.
D)Canada has the absolute advantage in the production of shoes and the United States has the absolute advantage in the production of apples.

Question 33

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.A Bangladeshi worker,on the other hand,can produce 100 pairs of gloves or grow 200 radishes per day.Which of the following statements is true?

A)Bangladesh should specialize in glove production since it possesses the comparative advantage in glove production.
B)Bangladesh should specialize in radish production since it possesses the comparative advantage in radish production.
C)Bangladesh should only produce gloves since it has the absolute advantage in glove production.
D)Bangladesh should only produce radishes since it has the absolute advantage in radish production.

Question 34

Suppose an American worker can make 100 chairs or catch 1000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.The United States possesses a(n)_______________ advantage in chair production,but not a(n)______________ advantage in fish production.

A)absolute;comparative
B)comparative;absolute
C)absolute;absolute
D)comparative;comparative

Question 35

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.A Canadian worker,on the other hand,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 _________.

A)5 apples;2 apples
B)¹/₅ apple;½ apple
C)2,000 apples;200 apples
D)100 apples;20 apples

Question 36

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day.A Canadian worker,on the other hand,can produce 10 pairs of shoes or grow 20 apples per day.The United States should:

A)produce both goods,since they have an absolute advantage in both goods,and not trade.
B)produce only shoes,since they have a comparative advantage in the production of shoes,and not trade.
C)produce apples,since they have a comparative advantage in the production of apples,and not trade.
D)produce apples,since they have a comparative advantage in the production of apples,and trade for shoes.

Question 37

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

A)then it must also possess the comparative advantage in the production of the other good.
B)then it must also possess the absolute advantage in the production of that good.
C)then it cannot also possess the comparative advantage in the production of the other good.
D)then it cannot also possess the absolute advantage in the production of that good.

Question 38

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

A)5 apples for each pair of shoes.
B)5 pairs of shoes for each apple.
C)¹/₅ apple for each pair of shoes.
D)1 pair of shoes for every 2 apples.

Question 39

Suppose an American worker can make 100 chairs or catch 1,000 fish per day.A Chilean worker,on the other hand,can produce 40 chairs or catch 400 fish per day.The United States has an absolute advantage in the production of both fish and chairs.This means that:

A)the United States should produce both goods and not trade with Chile.
B)the United States should produce only fish and trade with Chile to get chairs.
C)the United States should take advantage of Chile by trading with them.
D)the United States can produce more fish and chairs than Chile,given the same amount of workers.

Question 40

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

A)The United States has an absolute advantage and comparative advantage in the production of shoes.
B)The United States has an absolute advantage and comparative advantage in the production of apples.
C)The United States has an absolute advantage in the production of both goods,and comparative advantage in the production of neither.
D)The United States has an absolute advantage in the production of both goods,and comparative advantage in the production of both.

Question 41

Two countries will choose to specialize and trade only if:

A)the terms of trade fall between their opportunity costs for producing the goods on their own.
B)the opportunity costs are the same between the two nations.
C)the opportunity costs are astronomically high for producing the goods on their own.
D)one country possesses the absolute advantage in both goods,but the comparative advantage in only one good.

Question 42

A country that specializes:

A)spends all of its resources producing a particular good.
B)spends all of its resources producing those goods it has an absolute advantage in producing.
C)spends all of its resources producing only what other countries need.
D)spends all of its resources producing what it can make more of than anyone else.

Question 43

The United States and Canada trade hockey skates and apple pie.The United States has an absolute and a comparative advantage in the production of apple pie,therefore:

A)Canada must have the comparative advantage in the production of skates.
B)Canada must have the absolute advantage in the production of skates.
C)Canada must have the absolute and comparative advantage in the production of skates.
D)the United States must have the comparative advantage in the production of skates,too.

Question 44

When a producer is acting efficiently:

A)they are producing at a point on their production possibilities frontier.
B)they are producing at a point on or under their production possibilities frontier.
C)they are producing only one good.
D)they are producing the good in which they have a comparative advantage.

Question 45

Suppose England has a comparative advantage over the United States in producing tea.If this is true,then:

A)England should produce more tea than it needs and sell the rest to the United States.
B)England should produce a small amount of tea and buy the rest of the tea it wants from the United States.
C)England should not produce tea,and should instead buy it all from the United States.
D)the United States has nothing to gain from buying tea from England.

Question 46

When a country loses its comparative advantage in the production of a good:

A)it should stop trading and become self-sufficient.
B)it will gain the comparative advantage in the production of another good.
C)it will become a loser in trade in the long run.
D)it will still have the absolute advantage in the production of the good.

Question 47

Which of the following statements about absolute and comparative advantage is true?

A)A country may have a comparative advantage but not an absolute advantage in the production of a good.
B)A country must have the comparative advantage in the production of at least one good.
C)A country may have the absolute advantage in the production of all goods.
D)All of these statements are true.

Question 48

Economic theory states that losing comparative advantage in one good means creating a comparative advantage in another.This suggests that:

A)those who experience the transition may find it difficult in the short run.
B)it can be seen as a success in the long run.
C)outsourcing can be good overall for a society.
D)All of these statements are true.

Question 49

If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then:

A)Spain should produce the good it has an absolute advantage in producing.
B)Spain should produce the good it has a comparative advantage in producing.
C)Spain should remain self-sufficient if it can produce both efficiently.
D)Spain should trade only if it possesses the absolute advantage in the production of both goods.

Question 50

The improvement in outcomes that occurs when specialized producers exchange goods and services is called:

A)the gains from trade.
B)absolute advantage.
C)comparative advantage.
D)specialization.

Question 51

Assume for Germany that the opportunity cost to produce a jet is 50 cars.Some possible combinations of output for Germany could be:

A)(1,000 jets,5,000 cars)and (900 jets,10,000 cars).
B)(1,000 jets,5,000 cars)and (900 jets,15,000 cars).
C)(2,500 jets,2,000 cars)and (2,300 jets,20,000 cars).
D)(2,500 jets,2,000 cars)and (2,300 jets,3,000 cars).

Question 52

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.A bundle of goods that Country A could potentially make would be:

A)(1,000 iPods,500 tablets).
B)(500 iPods,500 tablets).
C)(500 iPods,250 tablets).
D)(750 iPods,150 tablets).

Question 53

People will choose to specialize and trade if:

A)they can acquire the goods they want at a lower cost than it will cost them to make the good themselves.
B)they can acquire the goods they want at a higher cost than it will cost them to make the good themselves.
C)they can acquire the goods they want from someone who is willing to trade with them.
D)they can acquire the goods they want from a capitalistic system of exchange.

Question 54

A country's newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world.The likely outcome of this action will be that the country's citizen's will be:

A)forced to consume less than before if they possessed a comparative advantage in the production of a good.
B)better off than before if they possess an absolute advantage in the production of a good.
C)better off than before only if they have the absolute advantage in the production of most goods they consume.
D)better off than before only if they have the comparative advantage in the goods they consume.

Question 55

People choose to specialize because:

A)it can lead to more consumption than being self-sufficient.
B)it can lead to consumption beyond the production possibilities frontier.
C)it allows people to acquire goods at a lower opportunity cost.
D)All of these statements are true.

Question 56

When a producer has an absolute advantage at producing a good,it means the producer:

A)can produce more of that good than others with the same number of workers.
B)has the ability to produce a good or service at a lower opportunity cost than others.
C)has no reason to trade with others.
D)is less efficient than other producers.

Question 57

People often choose to specialize and trade because:

A)it allows them to enjoy more goods than they can create on their own.
B)they can consume a bundle of goods beyond their own production possibilities.
C)it allows them to get to a point beyond their own production possibilities frontier.
D)All of these statements are true.

Question 58

When a country is acting efficiently:

A)it is producing at a point on or below their production possibilities frontier.
B)it is getting the most output by using all its available resources.
C)it has unemployed workers.
D)it is able to reach a point beyond its production possibilities frontier.

Question 59

If France is capable of producing either cheese or wine or some combination of those two products,then:

A)France should produce the one it is more efficient at producing.
B)France should produce the one for which it has a lower opportunity cost.
C)France should produce the one for which is has a higher opportunity cost.
D)France should remain self-sufficient if it has the absolute advantage in the production of both.

Question 60

When two countries specialize and trade with one another:

A)total production remains unchanged,but consumption rises.
B)total production increases,but only if comparative advantage exists.
C)total production may increase,depending on trade relations.
D)total production and consumption remain unchanged.

Question 61

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:

A)2 bananas.
B)3 bananas.
C)4 bananas.
D)5 bananas.

Question 62

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:

A)2 bananas.
B)3 bananas.
C)4 bananas.
D)5 bananas.

Question 63

Suppose that a worker in Econia can make either 10 iPods or 5 tablets each year.Econia has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.A bundle of goods that Country B could potentially make would be:

A)(400 iPods,2,000 tablets).
B)(200 iPods,1,500 tablets).
C)(300 iPods,450 tablets).
D)(400 iPods,1 tablet).

Question 64

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.Now we can say:

A)Country B now possesses the absolute advantage in the production of both goods.
B)Country B now possesses the absolute advantage in tablets only.
C)Country B now has the comparative advantage in iPod production.
D)Country B has no need to trade now.

Question 65

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.A bundle of goods that Country A could potentially make would be:

A)(500 iPods,500 tablets).
B)(500 iPods,400 tablets).
C)(500 iPods,300 tablets).
D)(500 iPods,200 tablets).

Question 66

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.Country B has:

A)an absolute advantage in the production of bananas,but not tomatoes.
B)an absolute advantage in the production of both bananas and tomatoes.
C)an absolute advantage in the production of tomatoes,but not bananas.
D)an absolute advantage in neither good.

Question 67

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.A bundle of goods that Country B could not make would be:

A)(400 iPods,250 tablets).
B)(300 iPods,500 tablets).
C)(200 iPods,750 tablets).
D)(100 iPods,1,000 tablets).

Question 68

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 would be working efficiently if they were producing:

A)(200 iPods,1,750 tablets).
B)(200 iPods,1,500 tablets).
C)(200 iPods,1,000 tablets).
D)(200 iPods,750 tablets).

Question 69

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 _______________ advantage in the production of tablets,which means they should specialize in __________________.

A)comparative;tablets
B)absolute;tablets
C)comparative;iPods
D)absolute;iPods

Question 70

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.Two possible consumption bundles that Country B could produce are:

A)(7.200 bananas,2,400 tomatoes)and (3,600 bananas,1,200 tomatoes)
B)(7.200 bananas,0 tomatoes)and (4,000 bananas,1,200 tomatoes)
C)(3.600 bananas,1,200 tomatoes)and (1,800 bananas,1,600 tomatoes)
D)(1.800 bananas,1,800 tomatoes)and (900 bananas,2,000 tomatoes)

Question 71

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:

A)iPods only.
B)tablets only.
C)both iPods and tablets.
D)neither iPods or tablets.

Question 72

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 would be working efficiently if they were producing:

A)(500 iPods,100 tablets).
B)(500 iPods,150 tablets).
C)(500 iPods,200 tablets).
D)(500 iPods,250 tablets).

Question 73

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.The opportunity cost of one tomato in Country A is:

A)100 bananas.
B)20 bananas.
C)5 bananas.
D)4 bananas.

Question 74

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.A bundle of goods that Country B could potentially make would be:

A)(400 iPods,2,000 tablets).
B)(300 iPods,500 tablets).
C)(200 iPods,1,500 tablets).
D)(100 iPods,2,000 tablets).

Question 75

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.Which of the following is true?

A)Country B should produce tablets and Country A should produce iPods,and they could benefit from trade.
B)Country B should produce iPods and Country A should produce tablets,and they could benefit from trade.
C)Neither country can benefit from trade since no comparative advantage exists.
D)Because Country B has the absolute advantage tablets,they should specialize in the production of tablets.

Question 76

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.The opportunity cost of one tomato in Country B is:

A)108 bananas.
B)18 bananas.
C)6 bananas.
D)3 bananas.

Question 77

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.Two possible consumption bundles that Country A could produce are:

A)(5,000 bananas,1,000 tomatoes)and (1,000 bananas,5,000 tomatoes)
B)(5,000 bananas,0 tomatoes)and (2,500 bananas,500 tomatoes)
C)(2,500 bananas,500 tomatoes)and (1,250 bananas,800 tomatoes)
D)(2,500 bananas,750 tomatoes)and (1,250 bananas,750 tomatoes)

Question 78

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:

A)iPods only.
B)tablets only.
C)both iPods and tablets.
D)neither iPods or tablets.

Question 79

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.Which of the following statements is now true?

A)Country B's production possibilities curve has rotated out from the x-axis.
B)Country B's production possibilities curve has shifted straight out.
C)Country B's production possibilities curve has shifted straight in.
D)Country B's production possibilities are now more limited because of crowding.

Question 80

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.A bundle of goods that Country A could not make would be:

A)(500 iPods,150 tablets).
B)(500 iPods,200 tablets).
C)(500 iPods,250 tablets).
D)(500 iPods,300 tablets).