ECN130 Chapter 8 Practice Exam

The table provides data on how long it takes Marla and Jason to cook lasagna and chicken curry. Marla's opportunity cost of making lasagna is __________ and Jason's is ______ Marla lasagna 4 Jason lasagna 3 Marla chicken curry 3 Jason chicken curry 1

0.75 of a chicken curry; 0.33 of a chicken curry

You are the manager at Pure Sweat Studio, a membership-based sauna club, assigning closing duties to your team members. In 12 minutes, Sadiquah can fold all the clean towels needed for a sauna room for then next day's use. She can clean a sauna room in 9 minutes. Landon can fold the towels in 10 minutes or clean a room in 15 minutes. Saqiquah's opportunity cost of folding towels is _______ sauna rooms

1.33

You place a phone call 7 Colleague place a phone call 5 You process an application 11 Colleagues process an application 13 Prior to specialization, in an hour, you place 5 phone calls and process 2 applications. Your colleagues place six phone calls and process 2 applications. After specialization, the gains from trade are ____phone calls and ______applications.

1:1

Cornell can type reports faster and more accurately than Alice, so Cornell has a ________ in typing reports

Absolute advantage

When trade is based on comparative advantage

Both trading partners end up better off than when there is no trade

You recently renovated a large historic building in the heart of your city to convert it into a boutique hotel, of which you're now the owner and operator. After a few months, you've noticed that the quantity of hotel bookings varies. Sometimes more rooms are booked on weekends, but sometimes certain events throughout the week result in a greater quantity of rooms booked. You now want to forecast when to expect the most bookings, but you don't know which events will bring the most people to the hotel. The MOST accurate forecast would likely result if you

Design an internal prediction market for employees to indicate their expectations

You're performing a competitive analysis for Dove, a leading personal care brand in the United States. Your findings indicate a trend toward consumer preference for deodorant made with more naturally derived ingredients. Because of the high price consumers are receiving for natural deodorant, Dove follows your recommendation and enters the natural deodorant market by launching the Dove Care by Plants line. For Dove the high price acted as a

Incentive

During the coronavirus pandemic, global supply chain issue caused the supply of new cars to shift left. While role did price play in the new car market? Price was a

Message to potential buyers that the marginal cost of manufacturing new cars is rising

You pay a plumber to install a new dishwasher in your home. Which statement is False.

Only the plumber experiences gains from trade because they received money

As long as people have different ____ everyone has a comparative advantage in something

Opportunity costs

A prediction market is a market where

Payoffs are linked to whether an uncertain event occurs

When a country's production mix becomes more specialized due to increased international trade based on comparative advantage

Some industries in the country will shrink and possibly disappear

When a manager uses comparative advantage to assign tasks in a work place, then each:

Task is assigned to the worker with the lowest opportunity cost for performing the task

Why does Apple design the iPhone in California but assemble the iPhone in China?

The united states has a comparative advantage in iPhone design

Economists generally believe that the person should specialize in the production of a good or service if

They can produce the product while forgoing fewer alternative products than any other person

On camping trips Katie, is much faster than her husband, Brett, at putting up a tent and starting a fire. Who should do each task if they want to maximize their time sitting around the campfire

They should first each focus on that task in which they a comparative advantage. When one finishes the assigned task, they can help the other

The table provides data on how long it takes Joachim and Zane to clean the bathrooms and wash the windows at a home. Who has the comparative advantage in washing windows? Joachim clean the bathrooms 4 Zane clean the bathrooms 3 Joachim wash the windows 10 Zane wash the windows 6

Zane, because he has a lower opportunity cost

Which benefit could a company gain from using internal markets

better allocation of its resources and more accurate predictions

Chantelle grows tomatoes and sells them at the farmer's market. Because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price functioning as

incentive

Price is functioning as a message when it

is a line of communication between buyers and sellers in a market