econ practice exam 3
if Japan must give up the production of 100 computers to produce 25 additional cellular telephones, the opportunity cost of producing 4 cellular telephones is ______ computers
16
when the market price is $1, what is the total amount of cheesecake slices purchased across Becca and Marcella?
twelve
statements about what option should be chosen are ______ statements
normative
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
which of the following statements is true regarding comparative advantage and absolute advantage?
people can have a comparative advantage without having an absolute advantage in a task
according to the figure, if there is international trade in this market, and the world price of engines is $800, the value of the domestic producer surplus is
$320,000
if 15 bottles are sold at a price of $8, what is the total producer surplus?
$45
The bath towel market is at equilibrium. How large is the economic surplus?
$60
according to the figure, the equilibrium world quantity of washing machines (in thousands) sold is
50
The Domestic Market for Sugar. Assume that PA is th domestic equilibrium price without trade and that PW is the world price. Before international trade, consumer surplus is equal to the area
A+B+D
The table shows the maximum number of shrimp and bananas that Issa and Lawrence can produce if thy produce only one good. In the absence of trade, Issa produces and consumes 9 shrimp and 2 bananas, and Lawrence produces and consumes 3 shrimp and 2 bananas. Now they decide to engage in trade. Which statement is incorrect?
For both to become better off, each should specialize in the production of some good. However, since Henry is equally productive in both goods, it doesn't matter which good each specializes in
In 2015, Donald Trump stated. "When did we beat Japan at anything? They send their cars over here by the million, and what do we do? When was the last time you saw a Chevrolet in Tokyo? It doesn't exist folks." Trump's argument fails to address which of the following economic arguments (that is, arguments based on a correct interpretation of economic theory)?
Japan may have a comparative advantage in manufacturing cars, but the United States has a comparative advantage in other goods, which it exports to Japan
markets distributes production across companies in a way that
minimizes costs
"The current trade deficit is $350 billion." This statement...
is positive
analysis that describes what would happen if various actions were taken is ______ analysis
positive
prices in currency futures markets and bond markets provide
predictions of future exchange rates and inflation rates
the producer surplus on a unit sold equals
price minus marginal cost
if a country has the comparative advantage in producing lumber, then with free trade
producer surplus in the market for lumber will increase
which is a common argument for trade protection?
the job creation argument
Katie is much faster than her husband, Brett, at putting up a tent and starting a fire. Who should take care of these tasks on their camping trip if they want to maximize their time sitting around a campfire?
they each have a comparative advantage in a particular task, and they should focus on doing that
Maia's opportunity cost for mowing the law is _____, and Juanita's opportunity cost for mowing the law is ______.
weeding 3 flower beds; weeding 2 flower beds
positive analysis is about
what is
Eliana and Olivia are at Barnes and Noble buying new calculators for the semester. Eliana is willing to pay $75, and Olivia is willing to pay $100 for the graphing calculator. The price of a calculator at Barnes and Noble is $65. How much is their total consumer surplus?
$45
The maximum Gabriel is willing to spend on a sculpture is $15,000. The sculptor sold Gabriel the sculpture for $10,000. What is Gabriel's consumer surplus?
$5,000
At the competitive price of $5, 10 hero sandwiches are sold. At this price, consumer surplus equals ______, and producer surplus equals ______.
$50; $25
if South Korea must give up the production of 75 notebook computers to produce 25 additional cell phones, the opportunity cost of producing 4 cell phones is ______ notebook computers
12
The United States must give up the production of 1,000 bicycles to produce 200 additional lawn mowers. The opportunity cost of production 100 bicycles is ______ lawn mower(s)
20
which statement explains who has a comparative advantage in changing a tire?
Bruno because he has a lower opportunity cost
If they spend all night writing poems, Leticia can write 10 poems and Isabella can write 5. If they spend all night making necklaces, Leticia can make 6 and Isabella can make 4. We know that:
Leticia's opportunity cost of writing poems is less than
The Market for Apple Computers in the United States. Assume that PA is the domestic equilibrium price without trade and PW is the world price. Producer surplus without international trade would be area
Y
Suppose that the world price of a pair of pants is $40. According to the figure, international trade will lead to ______ in the domestic producer surplus and ______ in the domestic consumer surplus
a decrease; an increase
The price of a cup of coffee goes up. This communicates to Stella that coffee has become more valuable. Price is functioning as
a signal
the principle of comparative advantage applies to interactions
between people as well as in business production decisions
Russia and Kazakhstan both production horses and oil. If Kazakhstan is much more efficient than Russia in the production of horses and slightly more efficient than Russia in the production of oil, ______ can benefit from trading horses and oil with each other
both countries
voluntary exchange occurs when
both the buyer and the seller will gain from the trade
what is the basis of specialization?
comparative advantage
A person is said to have a ______ in the production of a good if it can produce that good ______
comparative advantage; at a lower opportunity cost than another person
Ariana brought a new pair of shoes at Nordstrom. When she walked out of the store, she thought, "I got such a great deal; I would have paid $40 more for these shoes." This best describes the concept of
consumer surplus
marginal benefit minus price equals
consumer surplus
if Bishan wants to capitalize on comparative advantage in his life, then he should
do more of what he is relatively good at and then trade for other things
If a country's domestic price of a good is below the world price of a good, then with trade, the domestic quantity supplied of the good will be ______ the domestic quantity demanded
greater than
if France levies tariffs on American goods entering France, in the short run, this will lead to ______ American producers and ______ French producers
harm; benefit
Vietnam has a comparative disadvantage in ______-skilled labor. This explains why Vietnam is net ______ of high-skilled services.
high; importer
Suppose that the world price of an engine is $800. According to the figure, the domestic total surplus ______ by ______ in the free-trade equilibrium relative to the no international trade equilibrium
increases; $30,000
trade can be beneficial to trading partners because
it enables more goods and services to be obtained at a lower opportunity cost
which statement is true?
it is possible to have no absolute advantage but a comparative advantage in the production of some good
Which of the following is not an argument for limiting international trade? An increase in international trade may
lead to economic growth through specialization in comparative advantages
efficient outcomes
may not make everyone happy
if the United States removed all tariffs and quotas on lumber imports into the United States
producer surplus would decrease
When the government imposes a tariff on imported grapes, the price of grapes in California rises from PW to PT and there a net ______ in total surplus of
reduction; D+F
