Question 1

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed's opportunity cost of knitting one sweater is:​

Accepted Answer

Mohammed's opportunity cost of knitting one sweater is the amount of cookies he could have baked instead. Since he can bake 240 cookies or knit 5 sweaters in one week, the opportunity cost of knitting one sweater is 240 cookies / 5 sweaters = 48 cookies per sweater.

Question 2

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Which of the following is correct?​

Accepted Answer

Aisha can produce more sweaters and cookies than Mohammed in the same amount of time, which gives her an absolute advantage in both tasks. However, when we consider the opportunity cost of producing each item, Aisha has a lower opportunity cost of producing sweaters than Mohammed, which gives her a comparative advantage in knitting sweaters. Therefore, the correct answer is that Aisha has an absolute advantage in both tasks and a comparative advantage in knitting sweaters.

Question 3

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of doing one load of laundry is:​

Accepted Answer

Opportunity cost is defined as the value of the next best alternative forgone. In this case, the next best alternative for Maria when she is doing one load of laundry is typing. Since she can type 8 pages per hour, her opportunity cost of doing one load of laundry is 8 pages/12 loads = 2/3 of a page. Therefore, the answer is C.

Question 4

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of typing one page is:​

Accepted Answer

To find Hans' opportunity cost of typing one page, we need to determine how many loads of laundry he could have done in the time it takes him to type one page.

Hans' typing rate is 6 pages per hour, so it takes him 1/6 of an hour (or 10 minutes) to type one page. In that same amount of time, Hans can do 4/6 (or 2/3) of a load of laundry (since he can do 4 loads per hour).

Therefore, Hans' opportunity cost of typing one page is 2/3 of a load of laundry.

Choice D is the correct answer.

Question 5

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans and Maria would both be better off if:​

Accepted Answer

Hans has a comparative advantage in typing (6 pages per hour vs. Maria's 8, a smaller gap than in laundry), and Maria has a comparative advantage in doing laundry (12 loads per hour vs. Hans's 4). Specializing in these tasks and trading with each other would make both better off, according to the principle of comparative advantage.

Question 6

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. In any given amount of time, _____.​

Accepted Answer

Maria has an absolute advantage in doing laundry since she can do more loads per hour than Hans. She also has a comparative advantage in doing laundry since her opportunity cost of doing laundry (giving up typing) is lower than Hans' opportunity cost (giving up doing more laundry). However, Hans has an absolute advantage in typing since he can type more pages per hour than Maria.

Question 7

Bill trades a ginger snap for a chocolate chip cookie. This is an example of:​

Accepted Answer

The exchange of a ginger snap for a chocolate chip cookie represents a barter transaction, in which two individuals trade goods or services without the use of money.

Question 8

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of doing one load of laundry is:​

Accepted Answer

Hans' opportunity cost of doing one load of laundry is the amount of typing he foregoes to do that laundry. Since he can type 6 pages per hour and do 4 loads of laundry per hour, for each load of laundry, he gives up 6/4 = 1.5 pages.

Question 9

Barter occurs when:​

Accepted Answer

Barter is the direct exchange of one product for another product, without the use of money. So, option B is the best choice. Option A is not correct as sharing everything is not barter. Option C, D and E involve money, which is not a part of barter transactions.

Question 10

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?​

Accepted Answer

Opportunity cost is all about what one has to give up to do something else. In this case, Helen can either paint a room or bake 40 cakes in the same amount of time. Therefore, the opportunity cost of painting one room for Helen is equal to the number of cakes she could bake in that same amount of time, which is 40 cakes. Similarly, the opportunity cost of painting one room for Josh is equal to the number of cakes he could bake in the same amount of time, which is 60 cakes. Since Josh has a higher opportunity cost of baking cakes (i.e. he gives up the opportunity to paint more rooms than Helen does), it means that the opportunity cost of baking cakes is lower for him. Therefore, the correct answer is B.

Question 11

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Josh's opportunity cost of baking one cake is:​

Accepted Answer

Josh's opportunity cost of baking one cake is the painting of a fraction of a room. Since it takes Josh the time to bake 60 cakes to paint one room, his opportunity cost for baking one cake is 1/60th of a room.

Question 12

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed and Aisha would produce the maximum quantities of both cookies and sweaters if:​

Accepted Answer

If Mohammed only bakes, he can make 240 cookies in a week. If Aisha only bakes, she can make 480 cookies in a week. Therefore, Aisha is more productive when it comes to baking cookies.

If Mohammed only knits, he can make 5 sweaters in a week, while Aisha can make 15 sweaters in a week. Therefore, Aisha is more productive when it comes to knitting sweaters.

By choosing option D, Aisha will bake 480 cookies and knit 15 sweaters. Mohammed will bake no cookies and knit no sweaters. This will result in the highest combined output of cookies and sweaters.

Question 13

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed's opportunity cost baking one cookie is:​

Accepted Answer

Mohammed's opportunity cost of baking one cookie is the number of sweaters he could have knit in the time it takes to bake 240 cookies, which is 240/5 = 48 sweaters. Therefore, the answer is D) 1/48 of a sweater.

Question 14

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of typing one page is:​

Accepted Answer

First, we need to calculate Hans' opportunity cost of typing one page. It is given that he can type 6 pages per hour and do 4 loads of laundry per hour. So, his opportunity cost of typing one page is:

Opportunity cost of typing one page for Hans = 4/6 = 2/3 loads of laundry

Now, we need to calculate Maria's opportunity cost of typing one page. It is given that she can type 8 pages per hour and do 12 loads of laundry per hour. So, her opportunity cost of typing one page is:

Opportunity cost of typing one page for Maria = 12/8 = 3/2 loads of laundry

Therefore, Maria's opportunity cost of typing one page is 3/2 of a load of laundry, which is option C.

Question 15

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of knitting one sweater is:​

Accepted Answer

Aisha's opportunity cost of knitting one sweater is the number of cookies she could have baked instead. Therefore, we divide the number of cookies she can bake in a week (480) by the number of sweaters she can knit in a week (15): 480/15 = 32. Therefore, Aisha's opportunity cost of knitting one sweater is 32 cookies.

Question 16

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of baking one cookie is:​

Accepted Answer

Since opportunity cost is the value of the next best opportunity foregone, we need to compare the number of sweaters Aisha can knit with the number of cookies she can bake in one week.

From the given information, we know that Aisha can knit 15 sweaters OR bake 480 cookies in one week. Therefore, the opportunity cost of baking one cookie for Aisha is the number of sweaters she could have knitted instead.

To find this, we need to calculate the number of cookies Aisha would have to give up to knit one sweater:

1 sweater = (480 cookies / 15 sweaters) = 32 cookies

So, Aisha's opportunity cost of baking one cookie is 1/32 of a sweater. This is represented by option D.

Question 17

Eileen has a comparative advantage over Jan in piano tuning, but not shoe polishing. Therefore, _____.​

Accepted Answer

Eileen's comparative advantage in piano tuning suggests that she has a lower opportunity cost of piano tuning compared to Jan. However, this does not necessarily mean that Eileen has an absolute advantage in piano tuning. Similarly, the fact that Eileen does not have a comparative advantage in shoe polishing does not necessarily mean that Jan has an absolute advantage in shoe polishing. Therefore, the best choice is C, which states that Jan must have a lower opportunity cost of shoe polishing compared to Eileen, since Eileen's comparative advantage lies in piano tuning.

Question 18

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Helen's opportunity cost of baking one cake is:​

Accepted Answer

Since Helen can paint one room in the time it takes her to bake 40 cakes, her opportunity cost of baking one cake is the value of what she is giving up, which is painting 1/40 of a room. This means that for every cake she bakes, she could have painted 1/40 of a room instead. Therefore, the best choice is B.

Question 19

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then:​

Accepted Answer

The answer of If Daniel produces one pair of shoes...

Question 20

The figure below shows the production possibilities frontiers for rice and T-shirts for two countries, Costa Rica and United States. According to the figure below, in Costa Rica, the opportunity cost of 1 ton of rice is:​ ​
Figure 2.1
​

Accepted Answer

The answer of The figure below shows the production possibilities...

Quiz 2: Economic Tools and Economic Systems

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed's opportunity cost of knitting one sweater is:

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Which of the following is correct?

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of doing one load of laundry is:

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of typing one page is:

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans and Maria would both be better off if:

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. In any given amount of time, _____.

Bill trades a ginger snap for a chocolate chip cookie. This is an example of:

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Hans' opportunity cost of doing one load of laundry is:

Barter occurs when:

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Josh's opportunity cost of baking one cake is:

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed and Aisha would produce the maximum quantities of both cookies and sweaters if:

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Mohammed's opportunity cost baking one cookie is:

Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria's opportunity cost of typing one page is:

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of knitting one sweater is:

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of baking one cookie is:

Eileen has a comparative advantage over Jan in piano tuning, but not shoe polishing. Therefore, _____.

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, Helen's opportunity cost of baking one cake is:

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then:

The figure below shows the production possibilities frontiers for rice and T-shirts for two countries, Costa Rica and United States. According to the figure below, in Costa Rica, the opportunity cost of 1 ton of rice is: Figure 2.1