Question 1

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.

Accepted Answer

When a producer has a lower opportunity cost than others, it means that they have a comparative advantage over others in producing that good or service. This means that they can produce the good at a lower cost (in terms of resources or time) than others, and therefore can potentially sell it at a lower price while still making a profit. This concept is the basis for international trade, as countries with different comparative advantages can benefit from trading with each other.

Question 2

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.

Accepted Answer

A producer has a comparative advantage at producing a good when they can produce it at a lower opportunity cost than others. This means they can produce more of that good with the same resources or produce the same amount of the good with fewer resources. This gives the producer an advantage in terms of cost and efficiency which can be leveraged for trade with other producers. Therefore, option B is the correct answer. Choices A, C, and D are either unrelated or incorrect.

Question 3

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.

Accepted Answer

The opportunity cost of one pair of gloves for the United States is 6 radishes (300 radishes/50 gloves), and for Bangladesh, it is 2 radishes (200 radishes/100 gloves).

Question 4

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.

Accepted Answer

The opportunity cost of one pair of gloves in the United States is 6 radishes (300 radishes/50 gloves), while in Bangladesh it is 2 radishes (200 radishes/100 gloves). Therefore, the opportunity cost is higher in the United States, giving Bangladesh a comparative advantage in glove production, and the United States a comparative advantage in radish production.

Question 5

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

Accepted Answer

Canada has a lower opportunity cost for producing shoes compared to apples when compared to the United States. Therefore, Canada should specialize in producing shoes.

Question 6

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.

Accepted Answer

The answer of Suppose an American worker can make 100...

Question 7

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

Accepted Answer

The opportunity cost of a pair of shoes for the US worker is 5 apples (100/20), while for the Canadian worker it is 2 apples (20/10). Therefore, it is higher for the US worker, indicating that they have a comparative disadvantage in shoe production compared to Canada.

Question 8

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.

Accepted Answer

The opportunity cost for Canada is 2 apples for each pair of shoes because a Canadian worker can produce 10 pairs of shoes or 20 apples per day, meaning they give up 2 apples for every pair of shoes produced.

Question 9

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.

Accepted Answer

The concept of absolute advantage refers to a country's ability to produce a certain good or service using fewer resources (e.g., time, labor, and capital) than another country. In this scenario, the American worker can produce 50 pairs of gloves per day, whereas the Bangladeshi worker can produce 100 pairs of gloves per day. Therefore, Bangladesh has an absolute advantage in glove production. Similarly, the American worker can grow 300 radishes per day, while the Bangladeshi worker can grow 200 radishes per day. Hence, the United States has an absolute advantage in the production of radishes. Thus, choice D is the correct answer.

Question 10

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.

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 11

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.

Accepted Answer

The United States has a lower opportunity cost for producing radishes (1/6 pair of gloves per radish) compared to Bangladesh (1/2 pair of gloves per radish), giving it a comparative advantage in radishes. Bangladesh has a comparative advantage in gloves, as it has a lower opportunity cost for gloves (2 radishes per pair of gloves) compared to the United States (6 radishes per pair of gloves).

Question 12

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.

Accepted Answer

The answer of Suppose an American worker can make 20...

Question 13

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.

Accepted Answer

Comparative advantage refers to the ability of a country to produce a particular good at a lower opportunity cost compared to another country. In this case, Bangladesh has a lower opportunity cost in producing gloves since it can produce 100 pairs of gloves by sacrificing only 2 radishes, whereas the US can produce 50 pairs of gloves by sacrificing 6 radishes. On the other hand, Bangladesh can produce 1 radish by sacrificing only 0.5 pairs of gloves, whereas the US can produce 1 radish by sacrificing 1 pair of gloves. Therefore, Bangladesh should specialize in producing gloves to trade with the US, who should specialize in producing radishes. This way, both countries can benefit from the gains of trade by consuming more of both goods at a lower opportunity cost.

Question 14

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

Accepted Answer

The United States can produce more chairs per day than Chile, so it has an absolute advantage in chair production. However, Chile can produce more fish per day than the United States, so the United States does not have an absolute advantage in fish production.

Question 15

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

Accepted Answer

The opportunity cost of one pair of shoes for the United States is 5 apples (100 apples/20 shoes), while the opportunity cost of one pair of shoes for Canada is 2 apples (20 apples/10 shoes). Therefore, the best choice is A.

Question 16

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.

Accepted Answer

While the US has an absolute advantage in both goods, they have a comparative advantage in apples since their opportunity cost of producing apples is lower than Canada's. Therefore, the US should produce apples and trade with Canada for shoes, which they have a comparative disadvantage in producing. By specializing in the production of apples, the US can increase their overall output and efficiency, and both countries can benefit from trade through mutually beneficial exchange.

Question 17

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.

Accepted Answer

Comparative advantage refers to the ability of a country to produce a good at a lower opportunity cost than another country. Therefore, if a country has a comparative advantage in producing one good, it means that it has to give up fewer units of the other good to produce one unit of that good. This necessarily implies that it has a higher opportunity cost in producing the other good, and thus, it cannot have a comparative advantage in producing the other good. Therefore, Option C is the correct answer. Option A is incorrect as it is not necessary for a country to have a comparative advantage in producing both goods. Option B is incorrect as comparative advantage is not the same as absolute advantage which refers to the ability to produce a good more efficiently than another country without considering opportunity costs. Option D is incorrect as a country can still have an absolute advantage in producing a good even if it does not have the comparative advantage in producing that good.

Question 18

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.

Accepted Answer

The opportunity cost of producing one pair of shoes in the United States is the number of apples that could have been produced instead. Since an American worker can produce 100 apples or 20 pairs of shoes, the opportunity cost of one pair of shoes is 100/20 = 5 apples.

Question 19

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.

Accepted Answer

The United States has an absolute advantage because it can produce more of both goods (chairs and fish) than Chile with the same amount of workers.

Question 20

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.

Accepted Answer

The answer of Suppose an American worker can make 20...

Quiz 2: Specialization and Exchange

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

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

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:

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:

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: .

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?

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:

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?

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?

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:

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?

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?

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.

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:

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

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:

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:

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?

Quiz 2: Specialization and Exchange

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

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

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:

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:

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: ____________.

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?

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:

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?

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?

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:

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?

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?

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.

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:

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

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:

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:

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?

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: .

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.