Micro Quiz 3
Trade between countries a. allows each country to consume at a point outside its production possibilities frontier. b. can best be understood by examining the countries' absolute advantages. c. limits a country's ability to produce goods and services on its own. d. must benefit both countries equally; otherwise, trade is not mutually beneficial.
A
Refer to Table 3-1. What is Andia's opportunity cost of producing one bushel of wheat? a. 4/3 pounds of beef b. 6/5 pounds of beef c. 5/3 pounds of beef d. 3/5 pound of beef
C
Refer to Table 3-1. What is Andia's opportunity cost of producing one pound of beef? a. 4/3 bushels of wheat b. 6/5 bushels of wheat c. 3/5 bushel of wheat d. 5/3 bushels of wheat
C
Refer to Table 3-1. What is Zardia's opportunity cost of producing one bushel of wheat? a. 5/6 pound of beef b. 2/3 pound of beef c. 3/2 pounds of beef d. 3/4 pound of beef
C
Refer to Table 3-1. What is Zardia's opportunity cost of producing one pound of beef? a. 3/2 bushels of wheat b. 3/4 bushel of wheat c. 2/3 bushel of wheat d. 5/6 bushel of wheat
C
Refer to Table 3-1. Which of the following combinations of wheat and beef could Andia produce in one 8-hour day? a. 24 bushels of wheat and 40 pounds of beef b. 15 bushels of wheat and 20 pounds of beef c. 9 bushels of wheat and 25 pounds of beef d. 6 bushels of wheat and 35 pounds of beef
C
Refer to Table 3-2. Aruba should export a. coolers and import radios. b. neither good and import both goods. c. radios and import coolers. d. both goods and import neither good.
C
The production possibilities frontier illustrates a. the combinations of output that an economy should produce. b. the combinations of output that an economy should consume. c. the combinations of output that an economy can produce. d. All of the above are correct.
C
Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes ceramic vases, but Regan is better at producing both goods. In this case, trade could a. benefit Regan, but not Jayson. b. benefit neither Jayson nor Regan. c. benefit Jayson, but not Regan. d. benefit both Jayson and Regan.
D
Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that a. the United States should refrain altogether from producing pork and import all of what it requires from Mexico. b. the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico. c. Mexico has nothing to gain from importing United States pork. d. the United States should produce more pork than what it requires and export some of it to Mexico.
D
Trade can make everybody better off because it a. reduces competition among domestic companies. b. increases cooperation among nations. c. requires some workers in an economy to be retrained. d. allows people to specialize according to comparative advantage.
D
Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if a. the U.S. has an absolute advantage over Canada in producing computer software. b. the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S. c. Canada requires fewer resources than the U.S. to produce a bushel of wheat. d. the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada.
B
Refer to Table 3-1. Andia has a comparative advantage in the production of a. wheat and Zardia has a comparative advantage in the production of beef. b. beef and Zardia has a comparative advantage in the production of wheat. c. neither good and Zardia has a comparative advantage in the production of both goods. d. both goods and Zardia has a comparative advantage in the production of neither good.
B
Refer to Table 3-1. Andia has an absolute advantage in the production of a. both goods and Zardia has an absolute advantage in the production of neither good. b. neither good and Zardia has an absolute advantage in the production of both goods. c. beef and Zardia has an absolute advantage in the production of wheat. d. wheat and Zardia has an absolute advantage in the production of beef.
B
Refer to Table 3-1. Andia should specialize in the production of a. both goods and Zardia should specialize in the production of neither good. b. beef and Zardia should specialize in the production of wheat. c. neither good and Zardia should specialize in the production of both goods. d. wheat and Zardia should specialize in the production of beef.
B
Refer to Table 3-1. Assume that Andia and Zardia each has 360 minutes available. If each person divides his time equally between the production of wheat and beef, then total production is a. 42 bushels of wheat and 66 pounds of beef. b. 21 bushels of wheat and 33 pounds of beef. c. 35 bushels of wheat and 22 pounds of beef. d. 10.5 bushels of wheat and 16.5 pounds of beef.
B
Refer to Table 3-1. At which of the following prices would both Andia and Zardia gain from trade with each other? a. 6 bushels of wheat for 10.5 pounds of beef b. 12 bushels of wheat for 19 pounds of beef c. 24 bushels of wheat for 34 pounds of beef d. Andia and Zardia could not both gain from trade with each other at any price.
B
Refer to Table 3-2. Iceland should export a. neither good and import both goods. b. coolers and import radios. c. both goods and import neither good. d. radios and import coolers.
B
Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when a. the frontiers are straight lines. b. they choose not to trade with one another. c. the frontiers are bowed out. d. neither person faces trade-offs.
B
Refer to Table 3-1. Assume that Andia and Zardia each has 60 minutes available. If each person spends all his time producing the good in which he has a comparative advantage, then total production is a. 7 bushels of wheat and 11 pounds of beef. b. 3.5 bushels of wheat and 5.5 pounds of beef. c. 4 bushels of wheat and 5 pounds of beef. d. 3 bushels of wheat and 6 pounds of beef.
C
