Econ ch.2-3 practice

B. potatoes is the opportunity cost of 8.0 pounds of meat.

For the farmer, 12.8 pounds of A. meat is the opportunity cost of 16.0 pounds of potatoes. B. potatoes is the opportunity cost of 8.0 pounds of meat. C. meat is the opportunity cost of 10.6 pounds of potatoes. D. potatoes is the opportunity cost of 6.8 pounds of meat.

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is A. 1/6 table for Ken and 1/3 table for Traci. B. 6 tables for Ken and 3 tables for Traci. C. 6 tables for Ken and 1/3 table for Traci. D. 1/6 table for Ken and 3 tables for Traci.

A. 1/6 table for Ken and 1/3 table for Traci.

The production possibilities frontier illustrates A. the combinations of output that an economy can produce. B. the combinations of output that an economy should consume. C. the combinations of output that an economy should produce. D. All of the above are correct.

A. the combinations of output that an economy can produce.

B. 24 units of cheese and 15 units of wine

Assume that England and France each has 40 labor hours available. If each country divides its time equally between the production of cheese and wine, then total production is A. 40 units of cheese and 20 units of wine B. 24 units of cheese and 15 units of wine C. 8 units of cheese and 10 units of wine D. 48 units of cheese and 30 units of wine

C. 24.

Assume that Jamaica and Norway each has 4 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by A. 12. B. 48. C. 24. D. 36.

A. 64 cars and 16 airplanes.

Assume that Japan and Korea each has 2400 hours available. If each country divides its time equally between the production of cars and airplanes, then total production is A. 64 cars and 16 airplanes. B. 80 cars and 16 airplanes. C. 128 cars and 32 airplanes. D. 40 cars and 8 airplanes.

C. 8 mixers and 16 toasters.

Assume that Maya and Miguel each has 60 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is A. 3.5 mixers and 6 toasters. B. 20 mixers and 12 toasters. C. 8 mixers and 16 toasters. D. 15 mixers and 9 toasters.

C. 14 bushels of wheat and 27 yards of cloth.

Assume that Nick and Faldo each has 2 hours available. If each person divides his time equally between the production of wheat and cloth, then total production is A. 8 bushels of wheat and 15 yards of cloth. B. 16 bushels of wheat and 30 yards of cloth. C. 14 bushels of wheat and 27 yards of cloth. D. 28 bushels of wheat and 34 yards of cloth.

B. the rancher will gain from this trade, but the farmer will not.

Assume that the farmer and the rancher each has 24 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage and trade takes place at a price of 1 pound of pork for 2 pounds of tomatoes, then A. the farmer will gain from this trade, but the rancher will not. B. the rancher will gain from this trade, but the farmer will not. C. neither the farmer nor the rancher will gain from this trade. D. the farmer and the rancher will both gain from this trade.

A. face a constant trade-off between producing pitchers of lemonade and pizzas.

Both Alice and Betty A. face a constant trade-off between producing pitchers of lemonade and pizzas. B. can produce more pizzas than pitchers of lemonade if they devote all of their time to pizza production. C. would benefit from specializing in pizza production. D. would benefit from specializing in lemonade production.

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats. If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by A. 360 bushels of corn and 640 bushels of oats. B. 360 bushels of corn and 520 bushels of oats. C. 340 bushels of corn and 500 bushels of oats. D. 280 bushels of corn and 450 bushels of oats.

C. 340 bushels of corn and 500 bushels of oats.

D. Chris will produce only sauce and Tony will produce only tomatoes.

Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. If Chris and Tony both decide to specialize and produce only the good in which they have a comparative advantage, then A. Both Chris and Tony will produce only tomatoes. B. Chris will produce only tomatoes and Tony will produce only sauce. C. Both Chris and Tony will produce only sauce. D. Chris will produce only sauce and Tony will produce only tomatoes.

A production possibilities frontier is bowed outward when A. an economy is self-sufficient instead of interdependent and engaged in trade. B. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. C. the rate of tradeoff between the two goods being produced is constant. D. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

D. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

B. both goods and Spain has an absolute advantage in the production of neither good.

England has an absolute advantage in the production of A. neither good and Spain has an absolute advantage in the production of both goods. B. both goods and Spain has an absolute advantage in the production of neither good. C. cheese and Spain has an absolute advantage in the production of bread. D. bread and Spain has an absolute advantage in the production of cheese.

B. cheese and Spain should specialize in the production of bread.

England should specialize in the production of A. both goods and Spain should specialize in the production of neither good. B. cheese and Spain should specialize in the production of bread. C. neither good and Spain should specialize in the production of both goods. D. bread and Spain should specialize in the production of cheese.

A. 3 sweaters and 13 jackets.

If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is A. 3 sweaters and 13 jackets. B. 2 sweaters and 8 jackets. C. 5 sweaters and 8 jackets. D. 6 sweaters and 26 jackets

B. 600 tacos and 150 burritos

If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day? A. 400 tacos and 350 burritos B. 600 tacos and 150 burritos C. 700 tacos and 100 burritos D. 500 tacos and 250 burritos

A. Italy has a comparative advantage over the United States in producing wine.

In which of the following cases should the United States produce more noodles than it wants for its own use and trade some of those noodles to Italy in exchange for wine? A. Italy has a comparative advantage over the United States in producing wine. B. Americans know less than Italians know about cooking noodles. C. The United States has an absolute advantage over Italy in producing noodles. D. The opportunity cost of producing a gallon of wine is the same for Italy as it is for the United States.

A. 2.5 units of rice. This is higher than India's opportunity cost of producing bananas.

Indonesia's opportunity cost of producing bananas is A. 2.5 units of rice. This is higher than India's opportunity cost of producing bananas. B. 2.5 units of rice. This is lower than India's opportunity cost of producing bananas. C. 2/5 units of rice. This is higher than India's opportunity cost of producing bananas. D. 2/5 units of rice. This is lower than India's opportunity cost of producing bananas.

D. boats and import cars.

Italy should specialize in the production of A. neither good and import both goods. B. cars and import boats. C. both goods and import neither good. D. boats and import cars.

A. radios and Norway has a comparative advantage in the production of coolers.

Jamaica has a comparative advantage in the production of A. radios and Norway has a comparative advantage in the production of coolers. B. neither good and Norway has a comparative advantage in the production of both goods. C. both goods and Norway has a comparative advantage in the production of neither good. D. coolers and Norway has a comparative advantage in the production of radios.

B. poems.

Perry should specialize in the production of A. both goods. B. poems. C. novels. D. neither good.

C. 20 nails

Suppose Uzbekistan decides to increase its production of bolts by 10. What is the opportunity cost of this decision? A. 1/2 nail B. 5 nails C. 20 nails D. 2 nails

B. Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.

The nation of Cropitia has a comparative advantage over Bonovia in producing ham if A. Cropitia can produce more than 320 pounds of cheese per month. B. Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese. C. Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese. D. Cropitia can produce more than 400 pounds of ham per month.

C. 1/3 novel.

The opportunity cost of 1 poem for Jordan is A. 3 novels. B. 1/2 novel. C. 1/3 novel. D. 4 novels.

C. the slope of England's production possibilities frontier would be -0.25 and the slope of France's production possibilities frontier would be -2.5.

We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for France. If we were to do this, measuring cheese along the horizontal axis, then A. the slope of England's production possibilities frontier would be -4 and the slope of France's production possibilities frontier would be -0.4. B. the slope of England's production possibilities frontier would be 0.25 and the slope of France's production possibilities frontier would be 2.5. C. the slope of England's production possibilities frontier would be -0.25 and the slope of France's production possibilities frontier would be -2.5. D. the slope of England's production possibilities frontier would be 4 and the slope of France's production possibilities frontier would be 0.4.

D. the slope of Maya's production possibilities frontier would be -2 and the slope of Miguel's production possibilities frontier would be -2.

We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel. If we were to do this, measuring mixers along the horizontal axis, then A. the slope of Maya's production possibilities frontier would be -0.6 and the slope of Miguel's production possibilities frontier would be -0.6. B. the slope of Maya's production possibilities frontier would be -0.5 and the slope of Miguel's production possibilities frontier would be -0.5. C. the slope of Maya's production possibilities frontier would be -1.67 and the slope of Miguel's production possibilities frontier would be -1.67. D. the slope of Maya's production possibilities frontier would be -2 and the slope of Miguel's production possibilities frontier would be -2.

C. neither ham nor eggs.

Which good(s) does Denmark have an absolute advantage producing? A. ham but not eggs. B. both eggs and ham. C. neither ham nor eggs. D. eggs but not ham.

A. 8 units of cheese and 3 units of bread.

Which of the following combinations of cheese and bread could England not produce in 24 hours? A. 8 units of cheese and 3 units of bread. B. 7 units of cheese and 2 units of bread. C. 5 units of cheese and 3 units of bread. D. 6 units of cheese and 4 units of bread.

C. 1 toothbrush and 4 hairbrushes

Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes? A. 6 toothbrushes and 5 hairbrushes B. 4 toothbrushes and 2 hairbrushes C. 1 toothbrush and 4 hairbrushes D. 5 toothbrushes and 6 hairbrushes

A. Arturo and Dina could each consume 200 tacos and 200 burritos with trade.

Which of the following is not correct? A. Arturo and Dina could each consume 200 tacos and 200 burritos with trade. B. Total consumption of burritos could not be 600 either with or without trade. C. Neither Arturo nor Dina could each consume 200 tacos and 200 burritos without trade. D. Arturo and Dina could each consume 100 tacos and 100 burritos without trade.

D. (60 computers set up, 12 computers tested)

Which of the following points would not be on Jim's production possibilities frontier, based on a 40-hour week? A. (72 computers set up, 6 computers tested) B. (40 computers set up, 30 computers tested) C. (0 computers set up, 60 computers tested) D. (60 computers set up, 12 computers tested)

B. Betty has an absolute advantage in the production of both lemonade and pizzas.

Which of the following statements is correct regarding absolute advantage? A. Alice has an absolute advantage in the production of pizzas while Betty has an absolute advantage in the production of lemonade. B. Betty has an absolute advantage in the production of both lemonade and pizzas. C. Alice has an absolute advantage in the production of lemonade while Betty has an absolute advantage in the production of pizzas. D. Alice has an absolute advantage in the production of both lemonade and pizzas.

In most countries today, many goods and services consumed are imported from abroad, and many goods and services produced are exported to foreign customers. a. TRUE b. FALSE

a. TRUE

International trade can make some individuals within a country worse off, even as it makes the country as a whole better off. a. TRUE b. FALSE

a. TRUE

Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes. Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes. Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem. a. TRUE b. FALSE

a. TRUE

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make. a. TRUE b. FALSE

a. TRUE

Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can type 100 words in one minute. Timmy has an absolute advantage and a comparative advantage in editing, while Olivia has an absolute advantage and a comparative advantage in typing. a. TRUE b. FALSE

a. TRUE

Trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage. a. TRUE b. FALSE

a. TRUE

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods. a. TRUE b. FALSE

a. TRUE

For both parties to gain from trade, the price at which they trade must lie exactly in the middle of the two opportunity costs. a. TRUE b. FALSE

b. FALSE

Harry is a computer company executive, earning $200 per hour managing the company and promoting its products. His daughter Quinn is a high school student, earning $6 per hour helping her grandmother on the farm. Harry's computer is broken. He can repair it himself in one hour. Quinn can repair it in 10 hours. Harry's opportunity cost of repairing the computer is lower than Quinn's. a. TRUE b. FALSE

b. FALSE

If a country has the comparative advantage in producing a product, then that country must also have the absolute advantage in producing that product. a. TRUE b. FALSE

b. FALSE

It takes Ross 6 hours to produce a bushel of corn and 2 hours to wash and polish a car. It takes Courtney 6 hours to produce a bushel of corn and 1 hour to wash and polish a car. Courtney and Ross cannot gain from specialization and trade, since it takes each of them 6 hours to produce 1 bushel of corn. a. TRUE b. FALSE

b. FALSE

The principle of comparative advantage states that, regardless of the price at which trade takes place, everyone will benefit from trade if they specialize in the production of the good for which they have a comparative advantage. a. TRUE b. FALSE

b. FALSE

If the U.S. could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor, would it necessarily follow that the U.S. should specialize in television production? Explain your answer using the concepts of comparative and or absolute advantage. a. yes b. no

b. no