Question 1

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. What terms of trade would both countries be willing to agree to?

Accepted Answer

A)  One solar panel for 2 bikes
B)  One solar panel for 7 bikes
C)  One solar panel for 8 bikes
D)  One solar panel for 12 bikesE) A) and B)
F) B) and D)

Question 2

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to give 4 TVs to Country A for every cellphone it receives. Assuming Country A fully specializes in cellphone production and that it wishes to consume 24 cellphones total, how many TVs can Country A consume after trade?

Accepted Answer

A)  30 TVs
B)  48 TVs
C)  96 TVs
D)  28 TVsE) A) and D)
F) A) and C)

Question 3

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country B has a(n) _____ advantage at producing iPads, which means it should specialize in _____.

Accepted Answer

A)  comparative; iPads
B)  absolute; iPads
C)  comparative; iPhones
D)  absolute; iPhonesE) All of the above
F) A) and D)

Question 4

When two countries specialize and trade with one another, total production:

Accepted Answer

A)  remains unchanged, but consumption rises.
B)  increases, but only if a comparative advantage exists.
C)  may increase, depending on trade relations.
D)  remains unchanged, as does consumption.E) A) and D)
F) B) and D)

Question 5

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?

Accepted Answer

A)  (400 iPhones, 2,000 iPads) 
B)  (300 iPhones, 500 iPads) 
C)  (200 iPhones, 1,500 iPads) 
D)  (100 iPhones, 2,000 iPads) E) A) and B)
F) B) and C)

Question 6

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A has an absolute advantage at producing:

Accepted Answer

A)  iPhones.
B)  iPads.
C)  both iPhones and iPads.
D)  neither iPhones nor iPads.E) All of the above
F) B) and C)

Question 7

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Accepted Answer

A)  The U.S. has an absolute advantage at producing both gloves and radishes.
B)  The U.S. does not have an absolute advantage at producing either gloves or radishes.
C)  The U.S. has an absolute advantage at producing gloves, but not radishes.
D)  The U.S. has an absolute advantage at producing radishes, but not gloves.E) A) and D)
F) None of the above

Question 8

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf is largest between:

Accepted Answer

A)  points A and B.
B)  points B and C.
C)  points C and D.
D)  points A and D.E) A) and B)
F) A) and C)

Question 9

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we can infer that Country A should specialize in producing _____ and be willing to _____ five cars for each truck.

Accepted Answer

A)  trucks; accept no less than
B)  cars; give no more than
C)  trucks; accept no more than
D)  cars; give no less thanE) B) and D)
F) A) and B)

Question 10

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Accepted Answer

A)  Producing at point I is the best choice because both books and pizzas are made.
B)  Producing at point IV would be inefficient because no books would be produced.
C)  Producing at point III is the best choice because it's closest to the middle of the line.
D)  Producing at point II is impossible.E) None of the above
F) C) and D)

Question 11

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

Accepted Answer

A)  400 bushels of apples, 20 watermelons
B)  100 bushels of apples, 15 watermelons
C)  150 bushels of apples, 10 watermelons
D)  400 bushels of apples, 0 watermelonsE) B) and D)
F) B) and C)

Question 12

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

Accepted Answer

A)  an absolute advantage at producing both goods.
B)  an absolute advantage at producing tablets only.
C)  a comparative advantage at producing iPhones only.
D)  no need to trade.E) None of the above
F) C) and D)

Question 13

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Jerry decides to specialize in building tables, what are the limits to his terms of trade?

Accepted Answer

A)  Jerry will accept no less than 7 chairs for each table.
B)  Jerry will accept no less than 2 chairs for each table.
C)  Jerry will accept no less than 7 tables for each chair.
D)  Jerry will accept no less than 2 tables for each chair.E) B) and C)
F) A) and D)

Question 14

The concept of the invisible hand was first introduced to economics by:

Accepted Answer

A)  David Ricardo.
B)  Adam Smith.
C)  Thomas Malthus.
D)  Milton Friedman.E) All of the above
F) A) and D)

Exam 2: Specialization and Exchange

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we can infer that Country A should specialize in producing _ and be willing to _ five cars for each truck.

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. What terms of trade would both countries be willing to agree to?

Correct Answer
verified

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?

Correct Answer
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The concept of the invisible hand was first introduced to economics by:

Correct Answer
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When two countries specialize and trade with one another, total production:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf is largest between:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

Correct Answer
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Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Correct Answer
verified

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A has an absolute advantage at producing:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Correct Answer
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Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

Correct Answer
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Exam 2: Specialization and Exchange

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we can infer that Country A should specialize in producing _____ and be willing to _____ five cars for each truck.

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. What terms of trade would both countries be willing to agree to?

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?

Correct AnswerverifiedShow Answer

The concept of the invisible hand was first introduced to economics by:

Correct AnswerverifiedShow Answer

When two countries specialize and trade with one another, total production:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one scarf is largest between:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could not be produced?

Correct AnswerverifiedShow Answer

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A has an absolute advantage at producing:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is currently true?

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we can infer that Country A should specialize in producing _ and be willing to _ five cars for each truck.

Correct Answer
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