Question 1

An increase in the labour force shifts the production possibility frontier inwards over time.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to Table 2-4. Which of the following statements is true?

Accepted Answer

A)   Haley has a comparative advantage in making both products.
B)   Serena has a comparative advantage in making both products.
C)   Haley has a comparative advantage in making bracelets and Serena in making necklaces.
D)   Haley has a comparative advantage in making necklaces and Serena in making bracelets.

Question 3

-Refer to Table 2-8. What is Ireland's opportunity cost of producing one guitar?

Accepted Answer

A)   0.2 motorcycle
B)   5 motorcycles
C)   8 motorcycles
D)   32 motorcycles

Question 4

-Refer to Table 2-5. What is Fred's opportunity cost of making a unicycle?

Accepted Answer

A)   1/3 pogo stick
B)   3 pogo sticks
C)   1/2 unicycle
D)   1.3 pogo sticks

Question 5

-Refer to Table 2-6. If the two countries specialise and trade, who should export wheat?

Accepted Answer

A)   There is no basis for trade between the two countries.
B)   China
C)   South Korea
D)   They should both be exporting wheat.

Question 6

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. Billie faces ________ opportunity costs in the production of pillows and blankets.

Accepted Answer

A)   increasing
B)   constant
C)   decreasing
D)   negative

Question 7

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 14 blankets would appear

Accepted Answer

A)   along Billie's production possibility frontier.
B)   inside Billie's production possibility frontier.
C)   outside Billie's production possibility frontier.
D)   at the vertical intercept of Billie's production possibility frontier.

Question 8

-Refer to Table 2-3. Assume Dina's Cafe only produces sliders and hot wings. A combination of 80 sliders and 50 hot wings would appear

Accepted Answer

A)   along Dina's production possibility frontier.
B)   inside Dina's production possibility frontier.
C)   outside Dina's production possibility frontier.
D)   at the vertical intercept of Dina's production possibility frontier.

Question 9

On a diagram of a production possibility frontier, opportunity cost is represented by the production possibility frontier shifting outward.

Accepted Answer

A) True 
 B)False

Question 10

In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

Accepted Answer

A) True 
 B)False

Question 11

When you purchase a new set of spurs you do so in the

Accepted Answer

A)   resource market.
B)   product market.
C)   input market.
D)   factor market.

Question 12

-Refer to Table 2-4. What is Haley's opportunity cost of making a necklace?

Accepted Answer

A)   3/4 of a bracelet
B)   3 bracelets
C)   1 1/3 necklaces
D)   2 necklaces

Question 13

Which of the following statements is true?

Accepted Answer

A)   Individuals who have never been the best at doing anything cannot have a comparative advantage in producing any product.
B)   Individuals who have never been the best at doing anything can still have a comparative advantage in producing some product.
C)   Individuals who have never been the best at doing anything perform all tasks at a higher opportunity cost than others.
D)   Individuals who have never been the best at doing anything must have an absolute advantage in at least ones task.

Question 14

-Refer to Table 2-6. South Korea has a comparative advantage in the production of

Accepted Answer

A)   wheat.
B)   digital cameras.
C)   both products.
D)   neither product.

Question 15

-Refer to Table 2-10. This table shows the number of labour hours required to produce a digital cameras and a bushel of wheat in China and South Korea.
a. Which country has an absolute advantage in the production of digital cameras?
b. Which country has an absolute advantage in the production of wheat?
c. What is China's opportunity cost of producing one digital camera?
d. What is South Korea's opportunity cost of producing one digital camera?
e. What is China's opportunity cost of producing one pound of wheat?
f. What is South Korea's opportunity cost of producing one pound of what?
g. If each country specialises in the production of the product in which it has a comparative advantage, who should produce digital cameras?
h. If each country specialises in the production of the product in which it has a comparative advantage, who should produce wheat?

Accepted Answer

a. South Korea has an absolute advantage...

Question 16

-Refer to Figure 2-7. What is the opportunity cost of producing 1 pound of cashews in Indonesia?

Accepted Answer

A)   3/8 of a bolt of cotton
B)   5/8 of a bolt of cotton
C)   2 2/3 bolts of cotton
D)   320 bolts of cotton

Question 17

-Refer to Table 2-4. What is Serena's opportunity cost of making a bracelet?

Accepted Answer

A)   2 necklaces
B)   1/2 of a bracelet
C)   1/2 of a necklace
D)   3/4 of a bracelet

Question 18

An outward shift of a nation's production possibility frontier represents

Accepted Answer

A)   economic growth.
B)   rising prices of the two goods on the production possibility frontier model.
C)   an impossible situation.
D)   a situation in which a country produces more of one good and less of another.

Question 19

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

Accepted Answer

A) True 
 B)False

Question 20

The opportunity cost of going to an outdoor music festival is

Accepted Answer

A)   the enjoyment you receive from going to the festival.
B)   the value of the time spent at the festival.
C)   equal to the highest value of an alternative use of the time and money spent on the festival.
D)   zero because there is no overhead costs for an outdoor festival.

Exam 2: Choices and Trade - Offs in the Market

Which of the following statements is true?

Correct Answer
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On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

Correct Answer
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-Refer to Table 2-6. If the two countries specialise and trade, who should export wheat?

Correct Answer
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An increase in the labour force shifts the production possibility frontier inwards over time.

Correct Answer
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The opportunity cost of going to an outdoor music festival is

Correct Answer
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-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. Billie faces ________ opportunity costs in the production of pillows and blankets.

Correct Answer
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-Refer to Table 2-4. What is Serena's opportunity cost of making a bracelet?

Correct Answer
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-Refer to Figure 2-7. What is the opportunity cost of producing 1 pound of cashews in Indonesia?

Correct Answer
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-Refer to Table 2-6. South Korea has a comparative advantage in the production of

Correct Answer
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In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

Correct Answer
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-Refer to Table 2-3. Assume Dina's Cafe only produces sliders and hot wings. A combination of 80 sliders and 50 hot wings would appear

Correct Answer
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An outward shift of a nation's production possibility frontier represents

Correct Answer
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-Refer to Table 2-4. What is Haley's opportunity cost of making a necklace?

Correct Answer
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-Refer to Table 2-5. What is Fred's opportunity cost of making a unicycle?

Correct Answer
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-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 14 blankets would appear

Correct Answer
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-Refer to Table 2-4. Which of the following statements is true?

Correct Answer
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Correct Answer
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a. South Korea has an absolute advantage...
View Answer

-Refer to Table 2-8. What is Ireland's opportunity cost of producing one guitar?

Correct Answer
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When you purchase a new set of spurs you do so in the

Correct Answer
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On a diagram of a production possibility frontier, opportunity cost is represented by the production possibility frontier shifting outward.

Correct Answer
verified

Exam 2: Choices and Trade - Offs in the Market

Which of the following statements is true?

Correct AnswerverifiedShow Answer

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier.

Correct AnswerverifiedShow Answer

-Refer to Table 2-6. If the two countries specialise and trade, who should export wheat?

Correct AnswerverifiedShow Answer

An increase in the labour force shifts the production possibility frontier inwards over time.

Correct AnswerverifiedShow Answer

The opportunity cost of going to an outdoor music festival is

Correct AnswerverifiedShow Answer

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. Billie faces ________ opportunity costs in the production of pillows and blankets.

Correct AnswerverifiedShow Answer

-Refer to Table 2-4. What is Serena's opportunity cost of making a bracelet?

Correct AnswerverifiedShow Answer

-Refer to Figure 2-7. What is the opportunity cost of producing 1 pound of cashews in Indonesia?

Correct AnswerverifiedShow Answer

-Refer to Table 2-6. South Korea has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

In a two-good, two country world, if one country has an absolute advantage in the production of both goods, it cannot benefit by trading with the other country.

Correct AnswerverifiedShow Answer

-Refer to Table 2-3. Assume Dina's Cafe only produces sliders and hot wings. A combination of 80 sliders and 50 hot wings would appear

Correct AnswerverifiedShow Answer

An outward shift of a nation's production possibility frontier represents

Correct AnswerverifiedShow Answer

-Refer to Table 2-4. What is Haley's opportunity cost of making a necklace?

Correct AnswerverifiedShow Answer

-Refer to Table 2-5. What is Fred's opportunity cost of making a unicycle?

Correct AnswerverifiedShow Answer

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 9 pillows and 14 blankets would appear

Correct AnswerverifiedShow Answer

-Refer to Table 2-4. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. South Korea has an absolute advantage...View AnswerShow Answer

-Refer to Table 2-8. What is Ireland's opportunity cost of producing one guitar?

Correct AnswerverifiedShow Answer

When you purchase a new set of spurs you do so in the

Correct AnswerverifiedShow Answer

On a diagram of a production possibility frontier, opportunity cost is represented by the production possibility frontier shifting outward.

Correct AnswerverifiedShow Answer

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a. South Korea has an absolute advantage...
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