Question 1

-Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the farmer?

Accepted Answer

A)   3 hours of labour
B)   9 hours of labour
C)   1/3 kg of meat
D)   3kg of meatE) A) and D)
F) A) and C)

Question 2

-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Italy?

Accepted Answer

A)   1/4 bread
B)   1/2 bread
C)   2 breads
D)   4 breadsE) A) and B)
F) None of the above

Question 3

For a country producing two goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to Table 3-2. What does each producer have an absolute advantage in?

Accepted Answer

A)   The farmer has an absolute advantage in meat, and the rancher has an absolute advantage in potatoes.
B)   The farmer has an absolute advantage in neither, and the rancher has an absolute advantage in meat.
C)   The farmer has an absolute advantage in potatoes good, and the rancher has an absolute advantage in both goods.
D)   The farmer has an absolute advantage in potatoes, and the rancher has an absolute advantage in neither good.E) A) and B)
F) A) and C)

Question 5

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. What is the opportunity cost of 1 bushel of oats in Cornland?

Accepted Answer

A)   1/10 bushels of corn
B)   1/4 bushels of corn
C)   4 bushels of corn
D)   10 bushels of cornE) A) and B)
F) A) and C)

Question 6

The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 7

-Refer to Table 3-5. Which country has a comparative advantage in each product?

Accepted Answer

A)   Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in neither good.
B)   Canada has a comparative advantage in cars, and Japan has a comparative advantage in airplanes.
C)   Canada has a comparative advantage in airplanes, and Japan has a comparative advantage in cars.
D)   Canada has a comparative advantage in neither good, and Japan has a comparative advantage in cars.E) A) and C)
F) A) and B)

Question 8

Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. 
-Refer to Figure 3-5. If Fred and Ginger devote half of their time (20 hours)  to the production of each good, what would the total production be?

Accepted Answer

A)   7 ballet slippers and 8 tap shoes
B)   8 ballet slippers and 8 tap shoes
C)   9 ballet slippers and 6 tap shoes
D)   10 ballet slippers and 8 tap shoesE) All of the above
F) C) and D)

Question 9

-Refer to Table 3-3. What is the opportunity cost of one coat for Maria?

Accepted Answer

A)   1/5 sweater
B)   1/4 sweater
C)   1 sweater
D)   5 sweatersE) None of the above
F) C) and D)

Question 10

What is the opportunity cost of an item?

Accepted Answer

A)   the number of hours needed to earn money to buy it
B)   what you give up to get that item
C)   always less than the dollar value of the item
D)   always equal to the dollar value of the itemE) A) and B)
F) C) and D)

Question 11

Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. 
-Refer to Figure 3-5. Who has a comparative advantage in each good?

Accepted Answer

A)   Ginger has a comparative advantage in tap shoes, and Fred has a comparative advantage in ballet slippers.
B)   Ginger has a comparative advantage in both goods, and Fred has a comparative advantage in neither good.
C)   Ginger has a comparative advantage in ballet slippers, and Fred has a comparative advantage in tap shoes.
D)   Ginger has a comparative advantage in neither good, and Fred has a comparative advantage in both goods.E) B) and D)
F) B) and C)

Question 12

-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Denmark?

Accepted Answer

A)   1/4 bread
B)   1/2 bread
C)   2 breads
D)   4 breadsE) B) and D)
F) B) and C)

Question 13

Shawn can produce beach towels at a lower opportunity cost than Larissa. Who has an absolute or a comparative advantage in the production of beach towels?

Accepted Answer

A)   Shawn has a comparative advantage.
B)   Larissa has a comparative advantage.
C)   Shawn has an absolute advantage.
D)   Larissa has an absolute advantage.E) A) and B)
F) None of the above

Question 14

-Refer to Table 3-3. What does each of the two producers have a comparative or absolute advantage in?

Accepted Answer

A)   Maria has a comparative advantage in sweaters, and Courtney has an absolute advantage in neither good.
B)   Maria has a comparative advantage in coats, and Courtney has an absolute advantage in sweaters.
C)   Maria has a comparative advantage in sweaters, and Courtney has an absolute advantage in coats.
D)   Maria has a comparative advantage in coats, and Courtney has an absolute advantage in both goods.E) B) and D)
F) C) and D)

Question 15

Figure 3-3
Ice cream and cones are measured in kilograms. 
-Refer to Figure 3-3. What does each of the two producers have a comparative advantage in?

Accepted Answer

A)   Ben has a comparative advantage in cones, and Jerry has a comparative advantage in ice cream.
B)   Ben has a comparative advantage in ice cream, and Jerry has a comparative advantage in cones.
C)   Ben has a comparative advantage in neither good, and Jerry has a comparative advantage in both goods.
D)   Ben has a comparative advantage in both goods, and Jerry has a comparative advantage in neither good.E) B) and D)
F) A) and D)

Question 16

Figure 3-4 
-Refer to Figure 3-4. What does each of the two producers have a comparative advantage in?

Accepted Answer

A)   Ben has a comparative advantage in beer, and Jerry has a comparative advantage in wine.
B)   Ben has a comparative advantage in wine, and Jerry has a comparative advantage in beer.
C)   Ben has a comparative advantage in neither good, and Jerry has a comparative advantage in wine.
D)   Ben has a comparative advantage in both goods, and Jerry has a comparative advantage in neither.E) B) and D)
F) A) and B)

Question 17

What economic concept is the most relevant when defining comparative advantage?

Accepted Answer

A)   opportunity cost
B)   equity
C)   scarcity
D)   efficiencyE) A) and C)
F) None of the above

Question 18

-Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the rancher?

Accepted Answer

A)   4 hours of labour
B)   6 hours of labour
C)   2/3 kilograms of potatoes
D)   3/2 kilogram of potatoesE) All of the above
F) B) and D)

Question 19

South Korea can produce shoes, clothes, TV sets, and computers cheaper than any other country. What would one expect South Korea to export?

Accepted Answer

A)   all of these goods
B)   none of these goods
C)   some of these and other goods
D)   some of these but no other goodsE) All of the above
F) C) and D)

Question 20

-Refer to Table 3-6. Which country has a comparative or absolute advantage in each product?

Accepted Answer

A)   Denmark has a comparative advantage in bread, and Italy has an absolute advantage in cheese.
B)   Denmark has a comparative advantage in bread, and Italy has an absolute advantage in neither good.
C)   Denmark has a comparative advantage in cheese, and Italy has an absolute advantage in both goods.
D)   Denmark has a comparative advantage in both goods, and Italy has an absolute advantage in cheese.E) All of the above
F) C) and D)

Exam 3: Interdependence and the Gains From Trade

What economic concept is the most relevant when defining comparative advantage?

Correct Answer
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Shawn can produce beach towels at a lower opportunity cost than Larissa. Who has an absolute or a comparative advantage in the production of beach towels?

Correct Answer
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-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Italy?

Correct Answer
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Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5. Who has a comparative advantage in each good?

Correct Answer
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For a country producing two goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

Correct Answer
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-Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the rancher?

Correct Answer
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-Refer to Table 3-3. What does each of the two producers have a comparative or absolute advantage in?

Correct Answer
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South Korea can produce shoes, clothes, TV sets, and computers cheaper than any other country. What would one expect South Korea to export?

Correct Answer
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Figure 3-4 -Refer to Figure 3-4. What does each of the two producers have a comparative advantage in?

Correct Answer
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-Refer to Table 3-6. Which country has a comparative or absolute advantage in each product?

Correct Answer
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-Refer to Table 3-5. Which country has a comparative advantage in each product?

Correct Answer
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Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5. If Fred and Ginger devote half of their time (20 hours) to the production of each good, what would the total production be?

Correct Answer
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-Refer to Table 3-2. What does each producer have an absolute advantage in?

Correct Answer
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-Refer to Table 3-3. What is the opportunity cost of one coat for Maria?

Correct Answer
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Correct Answer
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Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3. What does each of the two producers have a comparative advantage in?

Correct Answer
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The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

Correct Answer
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What is the opportunity cost of an item?

Correct Answer
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-Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the farmer?

Correct Answer
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-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Denmark?

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

What economic concept is the most relevant when defining comparative advantage?

Correct AnswerverifiedShow Answer

Shawn can produce beach towels at a lower opportunity cost than Larissa. Who has an absolute or a comparative advantage in the production of beach towels?

Correct AnswerverifiedShow Answer

-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Italy?

Correct AnswerverifiedShow Answer

Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5. Who has a comparative advantage in each good?

Correct AnswerverifiedShow Answer

For a country producing two goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

Correct AnswerverifiedShow Answer

-Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the rancher?

Correct AnswerverifiedShow Answer

-Refer to Table 3-3. What does each of the two producers have a comparative or absolute advantage in?

Correct AnswerverifiedShow Answer

South Korea can produce shoes, clothes, TV sets, and computers cheaper than any other country. What would one expect South Korea to export?

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4. What does each of the two producers have a comparative advantage in?

Correct AnswerverifiedShow Answer

-Refer to Table 3-6. Which country has a comparative or absolute advantage in each product?

Correct AnswerverifiedShow Answer

-Refer to Table 3-5. Which country has a comparative advantage in each product?

Correct AnswerverifiedShow Answer

Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5. If Fred and Ginger devote half of their time (20 hours) to the production of each good, what would the total production be?

Correct AnswerverifiedShow Answer

-Refer to Table 3-2. What does each producer have an absolute advantage in?

Correct AnswerverifiedShow Answer

-Refer to Table 3-3. What is the opportunity cost of one coat for Maria?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3. What does each of the two producers have a comparative advantage in?

Correct AnswerverifiedShow Answer

The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

Correct AnswerverifiedShow Answer

What is the opportunity cost of an item?

Correct AnswerverifiedShow Answer

-Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the farmer?

Correct AnswerverifiedShow Answer

-Refer to Table 3-6. What is the opportunity cost of one unit of cheese in Denmark?

Correct AnswerverifiedShow Answer

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