AREC Chapter 2
An individual has an absolute advantage in producing pizzas if that individual: A)has a higher opportunity cost of producing pizzas than anyone else .B)can produce more pizzas in a given amount of time than anyone else .C)charges the lowest price for pizzas. D)has a lower opportunity cost of producing pizzas than anyone else.
B
An individual has an absolute advantage in producing pizzas if that individual: A)has a higher opportunity cost of producing pizzas than anyone else. B)can produce more pizzas in a given amount of time than anyone else. C)has a lower opportunity cost of producing pizzas than anyone else .D)charges the lowest price for pizzas.
B
Comparative advantage exists A) if one individual or group compare well with another individual or group. B) if one individual or group has a lower opportunity cost of pursuing an activity than another individual or group .C) when a shopper takes advantage of a temporary price reduction. D) if one individual or group can exploit, or take advantage of, another individual or group's weakness. E) when a comparison shopper sees a lower price in a particular store.
B
If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then________ has a(n) ________ advantage in producing shoes. A)Bob; comparative B)Bob; absolute C)Jane; absolute D)Jane; comparative
C
Points that lie below the production possibilities curve are inefficient because: A)producing more of one good means producing less of the other. B)more of one good could be produced without producing less of the other. C)producers face scarcity. D)too many goods are being produced.
C
If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that: A)Les has an absolute advantage in producing pants. B)Les has a comparative advantage in producing pants. C)Eva has a comparative advantage in producing pants .D)Les has both comparative and absolute advantage in producing pants.
A
If a nation has the lowest opportunity cost of producing a good, that nation has a(n)________ in the production of that good. A)comparative advantage B)absolute advantage and possibly a comparative advantage. C)comparative advantage and an absolute advantage D)absolute advantage
A
In general, individuals and nations should specialize in producing those goods for which they have a(n): A)comparative advantage. B)absolute advantage .C)absolute advantage and a comparative advantage. D)absolutely comparative advantage.
B
Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takesCathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis2 hours to make a pie and 1.5 hours to make a cake. What is the opportunity cost toCathy of making a cake? A)1.33 pies. B)2/3 of a pie. C)1 pie. D)1.5 pies.
B
If you have a comparative advantage in a particular task, then: A)you give up more to accomplish that task than do others. B)you are better at it than other people. C)you have specialized in that task, while others have not .D)you give up less to accomplish that task than do others.
D
Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takesCathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct? A)Cathy has a comparative advantage in pies, and Lewis has an absolute advantage in pies. B)Lewis has a comparative advantage in pies, and Cathy has an absolute advantage in pies. C)Lewis has a comparative and absolute advantage in pies. D)Cathy has a comparative and absolute advantage in pies.
D
The Principle of Increasing Opportunity Costs states that: A)opportunity costs increase when too little is produced .B)productive people do the hardest tasks first. C)when increasing production, resources with the lowest opportunity costs should be used last. D)when increasing production, resources with the lowest opportunity costs should be used first.
D
The United States was unable to maintain its dominance in the production of televisions because: A)the raw materials necessary to build televisions became scarce in the United States. B)the highly technical skills necessary to produce televisions are greater in other countries. C)the product designs evolved too rapidly for engineers in the United States to keep up. D)automated techniques allowed production to be outsourced to countries with less-skilled workers.
D
The production possibilities frontier is a graph that shows the combinations of goods and services A) an economy should produce. B) will produce in the future. C) an economy should consume. D) an economy can produce. E) an economy can consume.
D
Which of the following statements is true? A)Absolute advantage implies comparative advantage. B)Comparative advantage requires absolute advantage. C)Absolute advantage requires comparative advantage. D)Comparative advantage does not require absolute advantage.
D
