Deck 2: Specialization and Exchange

Question 1

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

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

Answer 1

B

Question 2

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is true? The opportunity cost of one watermelon:

A)will decrease as more watermelons are produced.
B)is constant.
C)will increase as more watermelons are produced.
D)is zero at point C.

Answer 2

B

Question 3

Consider the production possibilities frontier displayed in the figure shown.Which of the following combinations could be produced?

A) (20 watermelons, 400 bushels of apples)
B) (15 watermelons, 100 bushels of apples)
C) (10 watermelons, 300 bushels of apples)
D) (10 watermelons, 400 bushels of apples)

Answer 3

B

Question 4

The concepts of specialization and gains from trade can be applied to:

A) international trade.
B) why globalization has expanded recently.
C) consumer decisions.
D) household decisions.

Question 5

Consider the production possibilities frontier displayed in the figure shown.If this society chooses to produce 15 watermelons in can produce no more than:

A) 400 bushels of apples.
B) 300 bushels of apples.
C) 200 bushels of apples.
D) 100 bushels of apples.

Question 6

The invisible hand refers to the coordination that occurs from:

A) everyone working in his or her own self-interest.
B) a government agency finding efficiencies.
C) everyone working for the overall good of society.
D) a government coordinating economic activity.

Question 7

Consider the production possibilities frontier displayed in the figure shown.A society should choose to produce:

A) at point C because it is the safest.
B) at point B because it represents the most the society can produce.
C) at any point that produce some of each good.
D) at any point on the frontier rather than inside it.

Question 8

Consider the production possibilities frontier displayed in the figure shown.If this society chooses to produce 200 bushels of apples it can produce no more than:

A) 20 watermelons.
B) 15 watermelons.
C) 10 watermelons.
D) 5 watermelons.

Question 9

The slope of a production possibilities frontier measures:

A) the opportunity cost of producing one good in terms of the other good.
B) the trade-off in the consumption of one good versus the other good
C) how much of the resources must be used in order to produce one the goods.
D) inefficient production of a good.

Question 10

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is true?

A) Producing at point D would be inefficient.
B) Producing at point C would be inefficient.
C) Producing at point B would be inefficient.
D) Producing at point A would be inefficient.

Question 11

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 12

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is currently true?

A) Producing at point A is the best choice, because some of both items are made.
B) Producing at point D would be inefficient, since no books would be produced.
C) Producing at point C is the best choice, because it's closest to the middle.
D) Producing at point B is impossible.

Question 13

Consider the production possibilities frontier displayed in the figure shown.The opportunity cost of one watermelon is:

A) 10 bushels of apples.
B) 20 bushels of apples.
C) 30 bushels of apples.
D) 40 bushels of apples.

Question 14

Consider the production possibilities frontier displayed in the figure shown.A society faced with this curve currently:

A)cannot obtain point B.
B)can only obtain point C.
C)can only obtain point D or point A.
D)cannot obtain point C.

Question 15

Consider the production possibilities frontier displayed in the figure shown.A society faced with this curve could choose to produce:

A)A,B,or D.
B)A,B,or C.
C)A,D,or C.
D)B,C,or D.

Question 16

Consider the production possibilities frontier displayed in the figure shown.Which of the following combinations could not be produced?

A) (20 watermelons, 400 bushels of apples)
B) (15 watermelons, 100 bushels of apples)
C) (10 watermelons, 150 bushels of apples)
D) (0 watermelons, 400 bushels of apples)

Question 17

Consider the production possibilities frontier displayed in the figure shown.Which points are efficient and attainable with existing resources?

A)Only point B.
B)Only point A.
C)Points A and D.
D)Points A,C,and D.

Question 18

Consider the production possibilities frontier displayed in the figure shown.The opportunity cost of a bushel of apples is:

A) 3/20 watermelons.
B) 1/20 watermelons.
C) 1/40 watermelons.
D) 1/30 watermelons.

Question 19

Consider the production possibilities frontier displayed in the figure shown.The fact that the line slopes downward displays which economic concept?

A) Production possibilities
B) Trade-offs
C) Specialization
D) Efficiency

Question 20

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

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

Question 21

Consider the production possibilities frontier in the figure shown.As more and more cigars are produced the opportunity cost of producing more cigars:

A) decreases.
B) stays the same.
C) increases.
D) decreases then increases.

Question 22

Consider the production possibilities frontier in the figure shown.The opportunity cost of moving from point A to point B is:

A) 5 cars per cigar.
B) 10 cars per cigar.
C) 5 cigars per car.
D) 10 cigars per car.

Question 23

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 24

When nations trade,it:

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

Question 25

Consider the production possibilities frontier in the figure shown.The opportunity cost of cars when moving from point B to point C:

A)is greater than the opportunity cost of cars when moving from point A to point B.
B)is less than the opportunity cost of cars when moving from point A to point B.
C)is greater than the opportunity cost of cars when moving between any other two points.
D)there is no opportunity cost when we move from B to C.

Question 26

Which of the following statements about trade is true?

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

Question 27

When nations trade the result would most likely be:

A) increase in total production, which can benefit every nation involved.
B) increase in total production, which would benefit only the wealthier nation.
C) decrease in total production across nations but increases it for some.
D) decrease in total production across all nations but benefits every nation because they are individually more productive.

Question 28

The production possibilities frontier:

A) can show all possible combinations of goods but not tell us which combination society should choose.
B) can show the best combination of goods 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 29

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 chooses to move it.
D) become more meaningful in policy decisions.

Question 30

Consider the production possibilities frontier in the figure shown.As more and more cars are produced the opportunity cost of producing more cars:

A) decreases.
B) stays the same.
C) increases.
D) decreases then increases.

Question 31

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

A) caused the production possibilities frontier of the United States to shift in.
B) caused the production possibilities to increase, since it created a lot of work to rebuild the city affected areas.
C) caused the production possibilities frontier of the United States to shift.
D) didn't change the production possibilities frontier, but moved from a point on the frontier to a point inside the frontier.

Question 32

If society were to experience an increase in its available resources its production possibilities frontier would:

A) shift out.
B) shift in.
C) not move.
D) become convex.

Question 33

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 for only production of iPods.
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 from having more workers.

Question 34

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

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

Question 35

Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₁ to PPF₃?

A) More workers
B) Better printing press technology
C) A desire to read more books
D) Better sewing technology

Question 36

Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₁ to PPF₂?

A) More workers
B) Better printing press technology
C) A desire to read more books
D) Better sewing technology

Question 37

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 38

If a wealthy nation such as 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 39

Consider a society facing the production possibilities curves in the figure shown.What is the most likely cause of a society moving from PPF₃ to PPF₁?

A) A tornado
B) More workers
C) A desire to read lessbooks
D) Better sewing technology

Question 40

A realistic production possibilities curve:

A) is concave while a simple PPF has constant opportunity costs.
B) is straight lined while a simple PPFhas constant opportunity costs.
C) is straight lined while a simple PPF is bowed outward.
D) is concave while a simple PPFhas increasing opportunity costs.

Question 41

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.For Tom,the opportunity cost of building a fence is __________ dishes made.

A) 16
B) 12
C) 8
D) 4

Question 42

When a country is producing goods and services efficiently it:

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

Question 43

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 using resources 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 44

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country 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 45

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).

Question 46

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, 2,200 tomatoes)

Question 47

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.At the end of the day,if Jerry was efficient with his resources,he could have produced:

A) 12 dishes and 0 fences.
B) 10 dishes and 2 fences.
C) 8 dishes and 2 fences.
D) 6 dishes and 2 fences.

Question 48

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is:
A)12 cars.
B)4 trucks.
C)1.5 cars
D)3 cars.

A)measures the opportunity cost of trucks in terms of cars.
B)measures the trade-off that Country A face when deciding how to allocate resources.
C)is constant because the opportunity cost remains constant.
D)All of these statements are true.

Question 49

Suppose the figure shown represents the production possibilities frontier for Country A.Which of the following combinations of goods could Country A consume in the absence of trade?

A)(15 airplanes,15 trucks)
B)(10 airplanes,25 trucks)
C)(10 airplanes,30 trucks)
D)(5 airplanes,30 trucks)

Question 50

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.For Jerry,the opportunity cost of building a fence is ________ dishes made.

A) 14
B) 7
C) 4
D) 2

Question 51

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country A is:

A)30 cars.
B)6 trucks.
C)5 cars.
D)3 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 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 53

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 54

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 55

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.At the end of the day,Tom could have:

A) (16 dishes, 4 fences) or (8 dishes, 2 fences).
B) (8 dishes, 2 fences), or (4 dishes, 6 fences).
C) (8 dishes, 2 fences), or (4 dishes, 3 fences).
D) (12 dishes, 3 fences), or (8 dishes, 3 fences).

Question 56

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.If Tom divides his time evenly between activities and acts efficiently,he will produce:

A) 16 dishes and 4 fences.
B) 12 dishes and 3 fences.
C) 8 dishes and 2 fences.
D) 4 dishes and 3 fences.

Question 57

When a producer is operating efficiently it is producing:

A) at a point on its production possibilities frontier.
B) at a point on or under its production possibilities frontier.
C) only one good.
D) the good in which it has an absolute advantage.

Question 58

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 59

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.At the end of the day,Jerry could have produced:

A) 14 dishes and 7 fences.
B) 12 dishes and 6 fences.
C) 10 dishes and 5 fences.
D) 6 dishes and 4 fences.

Question 60

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 using resources efficiently if it produced:

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

Question 61

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.

Question 62

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 both goods.
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 63

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 nor tablets.

Question 64

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 65

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

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

Question 66

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

A)has the comparative advantage in car production only.
B)has the comparative advantage in truck production only.
C)has the comparative advantage in car and truck production.
D)does not possess the comparative advantage in either good.

Question 67

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) The United States has absolute advantage in producing both goods.

Question 68

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

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 69

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

A)the production possibilities curves are straight lines; realistic ones would be concave.
B)they only represent the production of two goods.
C)they only represent two countries.
D)All of these statements are true.

Question 70

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

A) and a comparative advantage in the production of shoes.
B) and a comparative advantage in the production of apples.
C) in the production of both goods and a comparative advantage in the production of neither good.
D) in the production of both goods and a comparative advantage in the production of both goods.

Question 71

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

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 72

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 73

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

A) Iowa should specialize in corn production.
B) Iowa has the comparative advantage in corn production.
C) Iowa should export corn to Ohio.
D) Ohio has the comparative advantage in corn production.

Question 74

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

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 75

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

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

Question 76

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

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

Question 77

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

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 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 A has the absolute advantage in the production of:

A) iPods only.
B) tablets only.
C) both iPods and tablets.
D) neither iPods nor tablets.

Question 79

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

A)cars and Country B has the comparative advantage in trucks.
B)trucks and Country B has the comparative advantage in cars.
C)cars and trucks.
D)neither cars nor trucks.

Question 80

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

A)an absolute advantage in the production of cars,and Country B has the absolute advantage in the production of trucks.
B)an absolute advantage in the production of trucks,and Country B has the absolute advantage in the production of cars.
C)the absolute advantage in the production of both cars and trucks.
D)the absolute advantage in neither the production of cars nor trucks.