Online Test 1 - Microeconomics

Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then a.Dave has a comparative advantage in the production of sweaters. b.Caroline has a comparative advantage in the production of sweaters. c.Dave has a comparative advantage in the production of socks. d.Dave has a comparative advantage in the production of both sweaters and socks.

A

Refer to Figure 2-10, Panel (a). Production is a.possible at points V, W, Y, and Z, but efficient only at points V, W, and Z. b.possible at points V, W, Y, and Z, but efficient only at point Y. c.possible at points U, V, W, and Z, but efficient only at points V, W, and Z. d.possible at points U, V, W, and Z, but efficient only at point U.

A

Refer to Figure 2-10, Panel (a). To gain 2 tractors by moving from point W to point V, society must sacrifice a.12 sofas. b.employment. c.efficiency. d.More than one of the above is correct.

A

A production possibilities frontier can shift outward if a.government increases the amount of money in the economy. b.there is a technological improvement. c.resources are shifted from the production of one good to the production of the other good. d.the economy abandons inefficient production methods in favor of efficient production methods.

B

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if a.Canada requires fewer resources than the U.S. to produce a bushel of wheat. b.the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S. c.the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada. d.the U.S. has an absolute advantage over Canada in producing computer software.

B

Refer to Figure 2-10, Panel (a). The movement from point W to point Y could be caused by a.economic growth. b.unemployment. c.an improvement in efficiency. d.an advance in production technology.

B

Refer to Figure 3-7. If Bintu and Juba each divides her time equally between making bowls and making cups, then total production is a.2 bowls and 6 cups. b.3 bowls and 7 cups. c.4 bowls and 8 cups. d.6 bowls and 14 cups.

B

Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels? a.200 bushels of wheat b.400 bushels of wheat c.600 bushels of wheat d.800 bushels of wheat

B

a.tacos and Dina should specialize in the production of burritos. b.burritos and Dina should specialize in the production of tacos. c.both goods and Dina should specialize in the production of neither good. d.neither good and Dina should specialize in the production of both goods.

B

A production possibilities frontier is a straight line when a.the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b.an economy is interdependent and engaged in trade instead of self-sufficient. c.the rate of tradeoff between the two goods being produced is constant. d.the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

C

An economy's production of two goods is efficient if a.all members of society consume equal portions of the goods. b.the goods are produced using only some of society's available resources. c.it is impossible to produce more of one good without producing less of the other. d.the opportunity cost of producing more of one good is zero.

C

Refer to Figure 2-10, Panel (a). Production at point Y is a.impossible and inefficient. b.impossible but efficient. c.possible but inefficient. d.possible and efficient.

C

Refer to Figure 3-13. Suppose Peru decides to increase its production of emeralds by 2. What is the opportunity cost of this decision? a.30 rubies b.40 rubies c.60 rubies d.120 rubies

C

Refer to Figure 3-13. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision? a.1/8 emerald b.1/3 emerald c.1 emerald d.3 emeralds

C

Refer to Figure 3-14. Dina has an absolute advantage in the production of a.burritos and a comparative advantage in the production of tacos. b.burritos and a comparative advantage in the production of burritos. c.neither good and a comparative advantage in the production of tacos. d.neither good and a comparative advantage in the production of burritos.

C

Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of wheat from 700 bushels to 1300 bushels? a.800 bushels of corn b.600 bushels of corn c.400 bushels of corn d.400 bushels of wheat

C

Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. Also suppose the U.S. has an absolute advantage in the production of both airplanes and televisions. The U.S. should a.not trade airplanes or televisions with Japan. b.import airplanes from Japan and export televisions to Japan. c.export airplanes to Japan and import televisions from Japan. d.export both airplanes and televisions to Japan.

C

A production possibilities frontier is bowed outward when a.the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b.an economy is self-sufficient instead of interdependent and engaged in trade. c.the rate of tradeoff between the two goods being produced is constant. d.the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

D

Economists generally support a.trade restrictions. b.government management of trade. c.export subsidies. d.free international trade.

D

Refer to Figure 3-7. If Bintu and Juba both spend all of their time making bowls, then total production is a.2 bowls. b.3 bowls. c.4 bowls. d.6 bowls.

D