Module 4

Table 2-6 Serena: B-8 N-16 Haley: B-9 N-12 Refer to Table 2-6. What is Haley's opportunity cost of making a bracelet? ] 1 1/3 necklaces 3 bracelets 3/4 of a bracelet 2 necklaces

1 1/3 necklaces

An increase in the price of off-road vehicles will result in a larger quantity of off-road vehicles supplied. a smaller quantity of off-road vehicles supplied. a decrease in the supply of off-road vehicles. an increase in the demand for off-road vehicles.

a larger quantity of off-road vehicles supplied.

A decrease in the price of GPS systems will result in: a larger quantity of GPS systems supplied. an increase in the supply of GPS systems. a decrease in the demand for GPS systems. a smaller quantity of GPS systems supplied.

a smaller quantity of GPS systems supplied.

Comparative advantage means the ability to produce a good or service at a higher profit level than any other producer. of a higher quality than any other producer. at a lower opportunity cost than any other producer. at a lower selling price than any other producer.

at a lower opportunity cost than any other producer.

You have an absolute advantage whenever you can produce something at a lower opportunity cost than others. prefer to do one particular activity. are better educated than someone else. can produce more of something than others with the same resources.

can produce more of something than others with the same resources.

The supply curve for watches shows the relationship between the price of watches and the quantity of watches supplied. shows the supply of watches consumers are willing and able to buy at any given price. shows the relationship between the quantity of watches firms are willing and able to supply and the quantity of watches consumers are willing and able to purchase. is downward sloping.

shows the relationship between the price of watches and the quantity of watches supplied.

An increase in the quantity of a product supplied is caused by an increase in the price of the product. True False

True

Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price. True False

True

All else equal, as the price of a product falls, the quantity supplied increases. True False

False

Table 2-6 Serena: B-8, N-16 Haley: B-9, N-12 Table 2-6 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. Refer to Table 2-6. Which of the following statements is true? Haley has a comparative advantage in making both products. Haley has a comparative advantage in making bracelets and Serena in making necklaces. Haley has a comparative advantage in making necklaces and Serena in making bracelets. Serena has a comparative advantage in making both products.

Haley has a comparative advantage in making bracelets and Serena in making necklaces.

Which of the following statements is true? Individuals who have never been the best at doing anything perform all tasks at a higher opportunity cost than others. Individuals who have never been the best at doing anything can still have a comparative advantage in producing some product. Individuals who have never been the best at doing anything cannot have a comparative advantage in producing any product. Individuals who have never been the best at doing anything must have an absolute advantage in at least ones task.

Individuals who have never been the best at doing anything can still have a comparative advantage in producing some product.

An increase in the price of pineapples will result in an increase in the supply of pineapples. a decrease in the demand for pineapples. a smaller quantity of pineapples supplied. a larger quantity of pineapples supplied.

Selected Answer: a larger quantity of pineapples supplied.

In October 2005, the U.S. Fish and Wildlife Service banned the importation of beluga caviar, the most prized of caviars, from the Caspian Sea. What happened in the market for caviar in the United States? The demand curve shifted to the left. The supply curve shifted to the left. The supply curve shifted to the right. The demand curve shifted to the right.

The supply curve shifted to the left.

If the United States placed an embargo on Swedish products, what would happen in the U.S. market for Swedish furniture? The demand curve would shift to the left. The supply curve would shift to the right. The demand curve would shift to the right. The supply curve would shift to the left.

The supply curve would shift to the left.

Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced an increase in the quantity supplied. a decrease in the quantity supplied. a decrease in supply. an increase in supply.

a decrease in supply.