Question 1

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice has advantage in producing .

Accepted Answer

Alice produces more bookshelves than Roger in one week, making her have a comparative advantage in producing bookshelves.

Question 2

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. If Tom and Jerry trade

Accepted Answer

Both Tom and Jerry will benefit if they trade because they have different opportunity costs for burning CDs and making sandwiches. Tom is relatively slower at burning CDs, while Jerry is relatively slower at making sandwiches. By specializing in the task they are faster at and trading, they can both save time and increase their overall productivity.

Question 3

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is

Accepted Answer

The opportunity cost of producing one sandwich is the amount of pizza Joe could have produced instead. Since Joe can make 5 pizzas in an hour, he gives up 1/2 pizza for each sandwich he makes (5 pizzas/10 sandwiches = 1/2 pizza per sandwich).

Question 4

Blue Violet's Sweet Pansy's 
-Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces and Blue Violet produces .

Accepted Answer

The answer of Blue Violet's Sweet Pansy's 
-Two countries, Blue...

Question 5

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Accepted Answer

The opportunity cost of producing an additional unit of X is the amount of Y that must be given up. If country B is producing 4 units of X and 6 units of Y, the opportunity cost is calculated by the ratio of the loss in Y to the gain in X. If the production possibility frontier is linear, the opportunity cost is constant, and here it is 3/2 units of Y per additional unit of X.

Question 6

Blue Violet's Sweet Pansy's 
-Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities.

Accepted Answer

The answer of Blue Violet's Sweet Pansy's 
-Two countries, Blue...

Question 7

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies.
Advantage in making pizzas.

Accepted Answer

Andy can make 5 pizzas in an hour, while Chris can make 6 pizzas in an hour. Therefore, Andy has a comparative advantage in making pizzas.

Question 8

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following is correct?

Accepted Answer

Comparative advantage means that one person can produce a good or service at a lower opportunity cost than the other person. Opportunity cost is measured in terms of what the person has to give up in order to produce a particular good or service.

In this scenario, Teddy can pick 60 pieces of fruit in a day, or catch 20 fish. This means that if he spends his whole day picking fruit, he is giving up the opportunity to catch 20 fish. Therefore, his opportunity cost of picking fruit is 20 fish. On the other hand, if he spends his whole day catching fish, he is giving up the opportunity to pick 60 pieces of fruit. Therefore, his opportunity cost of catching fish is 60 pieces of fruit.

Similarly, Homer can pick 100 pieces of fruit in a day, or catch 150 fish. This means that if he spends his whole day picking fruit, he is giving up the opportunity to catch 150 fish. Therefore, his opportunity cost of picking fruit is 150 fish. On the other hand, if he spends his whole day catching fish, he is giving up the opportunity to pick 100 pieces of fruit. Therefore, his opportunity cost of catching fish is 100 pieces of fruit.

Comparing the opportunity costs, we can see that Homer has a lower opportunity cost of catching fish than Teddy (100 pieces of fruit vs. 20 fish), while Teddy has a lower opportunity cost of picking fruit than Homer (20 fish vs. 150 pieces of fruit). Therefore, Homer has a comparative advantage in catching fish, while Teddy has a comparative advantage in picking fruit. This means that Teddy should specialize in picking fruit, while Homer should specialize in catching fish.

Overall, choice C is correct because it correctly identifies the comparative advantages of each individual.

Question 9

Betty and Ann live on a desert island. With a day's labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts. Ann's opportunity cost of producing 1 coconut is and she should specialize in the production of .

Accepted Answer

Ann's opportunity cost of producing 1 coconut is 2 fish (since she gives up 8 fish to produce 4 coconuts). She should specialize in coconuts because her opportunity cost for coconuts is lower than Betty's.

Question 10

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is _, and she should specialize in the production of .

Accepted Answer

Betty's opportunity cost of producing 1 fish is 1/3 coconut. She should specialize in the production of fish because her opportunity cost of producing fish is lower than Ann's.

Question 11

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. Tom has a comparative advantage in and Jerry has a comparative advantage in _ .

Accepted Answer

Tom has a comparative advantage in burning CDs because he takes less time relative to making sandwiches compared to Jerry. Jerry has a comparative advantage in making sandwiches because he takes less time relative to burning CDs compared to Tom.

Question 12

-Two countries, Blue Violet and Orange Rose, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. has a comparative advantage in teapots and _ has a comparative advantage in coffeepots.

Accepted Answer

Blue Violet has a comparative advantage in teapots because it can produce them at a lower opportunity cost than Orange Rose. Conversely, Orange Rose has a comparative advantage in coffeepots because it can produce them at a lower opportunity cost than Blue Violet.

Question 13

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. Both individuals will be better off if

Accepted Answer

The answer of Tom takes 20 minutes to burn a...

Question 14

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is

Accepted Answer

The opportunity cost of producing an additional unit of Y is the amount of X that must be given up. If country B is producing 4 units of X and 6 units of Y, and the opportunity cost is 2/3 unit of X, it means for every additional unit of Y, 2/3 unit of X is sacrificed.

Question 15

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of

Accepted Answer

The answer of In one week Alice can produce 5...

Question 16

-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. The opportunity cost of producing more of

Accepted Answer

Country A produces more units of Y than country B with the same units of X, indicating a lower opportunity cost for producing good Y in country A.

Question 17

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?

Accepted Answer

Country Gamma has a lower opportunity cost of producing one ton of wheat than Country Beta (4 tons of corn vs. 8 tons of corn). This means that Country Gamma can produce wheat at a lower cost (in terms of corn forgone) than Country Beta. Therefore, Country Gamma has the comparative advantage in the production of wheat.

Question 18

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

Accepted Answer

Comparative advantage refers to the ability of an individual, firm, or country to produce a specific product more efficiently than another individual, firm, or country. To determine the best choice, we need to compare the opportunity costs of producing each good.

Joe can produce 20 sandwiches or 10 pizzas in an hour. Therefore, the opportunity cost of producing one sandwich is 1/2 pizza, and the opportunity cost of producing one pizza is 2 sandwiches.

Beth can produce 36 sandwiches or 27 pizzas in an hour. Therefore, the opportunity cost of producing one sandwich is 3/4 pizza, and the opportunity cost of producing one pizza is 4/3 sandwiches.

Because Beth has a lower opportunity cost in producing pizzas, she should produce pizzas, and Joe should produce sandwiches. Therefore, choice C is the best option.

Question 19

-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

Accepted Answer

The answer of 
-In the table above, country A is...

Question 20

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

Accepted Answer

To determine the opportunity cost of producing one unit of pizza, we must calculate the opportunity cost of producing one sandwich and the opportunity cost of producing one pizza for both Joe and Beth.

For Joe, the opportunity cost of producing one pizza is: 
1 hour / 5 pizzas = 0.2 hours per pizza 
The opportunity cost of producing one sandwich is: 
1 hour / 10 sandwiches = 0.1 hours per sandwich

For Beth, the opportunity cost of producing one pizza is: 
1 hour / 9 pizzas = 0.111 hours per pizza 
The opportunity cost of producing one sandwich is: 
1 hour / 12 sandwiches = 0.083 hours per sandwich

Therefore, Beth has a lower opportunity cost of producing pizza than Joe (0.111 versus 0.2). So, it would be more efficient for Beth to produce pizza while Joe produces sandwiches. Therefore, Choice C is correct.

Quiz 2: The Economic Problem