Modules 1-4

which country has a comparative advantage in producing each good

Wheat: Country A, textile: Country B

which country has an absolute advantage in producing each good

Wheat: Country A, textile: Country B

Suppose that you prefer reading a book you already own to watching TV and that you prefer watching TV to listening to music. If these are your only three choices, what is the opportunity cost of reading? a. watching TV and listening to music b. watching TV c. listening to music d. sleeping e. the price of the book

b

the other things equal assumption allows economists to a. avoid making assumptions about reality b. focus on the effect of only one change at a time c. oversimplify d. allow nothing to change in their model e, reflect all aspects of the real world in their model

b

which of the following statements is/are normative? 1. the price of gasoline is rising 2. the price of gasoline is too high 3. gas prices are expected to fall in the near future a. 1 only b. 2 only c. 3 only d. 1 and 3 only e. 1, 2, and 3

b

which point(s) on the graph represent efficiency in production? a. B and C b. A and D c. A, B, C, and D d. A. B, C, D, and E e. A, B, C, D, E, and F

c

If the two countries specialize and trade, which one describes the countries' imports?

Import Wheat: Country B, Import Textiles: Country A

During the recession phase of a business cycle, which of the following is likely to increase? a. the unemployment rate b. the price level c. economic growth rates d. the labor force e. wages

a

For country A, the opportunity cost of a bushel of wheat is a. ½ units of textiles b. ⅔ units of textiles c. 1⅓ units of textiles d. 1½ units of textiles e. 2 units of textiles

a

which of the following questions is studied in microeconomics? a. should I go to college or get a job after I graduate? b. what government policies should be adopted to promote employment in the economy? c. how many people are employed in the economy this year? d. has the overall level of prices in the economy increased or decreased this year? e. what determines the overall salary levels paid to workers in a given year?

a

which of the following is the most likely result of inflation? a. falling employment b. a dollar will buy more than it did before c. people are discouraged from holding cash d. price stability e. low aggregate output per capita

c

An increase in unemployment could be represented by a movement from point a. D to point C. b. B to point A. c. C to point F. d. B topoint E. e. E to point B.

d

What is the highest price Country B is willing to pay to buy wheat from Country A? a. ½ units of textiles b. ⅔ units of textiles c. 1 unit oftextiles d. 1' gaits of textiles e. 2 units of textiles

d

Which of the following is an example of a resource? 1. petroleum 2. a factory 3. a cheeseburger dinner a. 1 only b. 2 only c. 3 only d. 1 and 2 only e. 1, 2, and 3

d

for this economy, an increase in the quantity of capital goods produced without a corresponding decrease in the quantity of consumer good produced a. cannot happen because there is always an opportunity cost b. is represented by a movement from point E to point A c. is represented by a movement from point C to point B d. is represented by a movement from point E to point B e. is only possible with an increase in resources or technology

d

the labor force is made up of everyone who is a. employed b. old enough to work d. employed or unemployed e. employed or capable of working

d

which of the following situations represent(s) resource scarcity? 1. Rapidly growing economies experience increasing levels of water pollution 2. There is a finite amount of petroleum in the physical environment 3. Cassette tapes are no longer being produced a. 1 only b. 2 only c. 3 only d. 1 and 2 only e. 1, 2, and 3

d

Which of the following might allow this economy to move from point B to point F? a. more workers b. discovery of new resources c. building new factories d. technological advances e. all of che above

e

a sustained increase in aggregate output over several decades represents a. an expansion b. a recovery c. a recession d. a depression e. economic growth

e

This production possibilities curve shows the trade-off between consumer goods and capital goods. Silkse capital goods are a resource, an increase in the production of capital goods today will increase the economy's production possibilities in che future. Therefore, all other things equal (ceteris paribus), producing at which point today will result in the largest outward shift ofthe PPC in the future?

point A