Question 1

In the graph shown, what change would increase production efficiency?

Accepted Answer

A)   Moving from A to D
B)   Moving from A to B
C)   Moving from C to D
D)   Moving from D to BE) A) and B)
F) A) and C)

Question 2

Mexico has a comparative advantage in producing corn:

Accepted Answer

A)   if its opportunity cost of producing corn is higher than the opportunity cost in other countries.
B)   if its opportunity cost of producing corn is the same as the opportunity cost in other countries.
C)   if its opportunity cost of producing corn is lower than the opportunity cost in other countries.
D)   regardless of the opportunity cost in other countries.E) A) and B)
F) None of the above

Question 3

Suppose that in Slovakia one unit of labor can produce either 20 tons of wheat or 40 tons of soy and in Poland one unit of labor can produce either 40 tons of wheat or 20 tons of soy. If each country has two units of labor, which of the following consumption combinations can be attained only with trade?

Accepted Answer

A)   Slovakia consumes 80 tons of soy.
B)   Slovakia consumes 30 tons of both soy and wheat.
C)   Poland consumes 80 tons of wheat.
D)   Poland consumes 40 tons of wheat and 20 tons of soy.E) A) and B)
F) None of the above

Question 4

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Accepted Answer

A)   Neither can benefit because John has nothing to offer.
B)   John could benefit from an exchange, but Jane cannot because she is better at both.
C)   Both can benefit because John has a comparative advantage in laundry.
D)   Both can benefit because John has a comparative advantage in cleaning.E) None of the above
F) All of the above

Question 5

Given a production possibility curve for good X (on the x-axis)  and good Y (on the y-axis) , the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Accepted Answer

A)   −6.
B)   −4.
C)   6.
D)   4.E) A) and B)
F) B) and D)

Question 6

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Accepted Answer

A)   flat.
B)   straight.
C)   bowed out.
D)   bowed in.E) A) and B)
F) C) and D)

Question 7

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Accepted Answer

A)   The value of the U.S. dollar falls.
B)   The value of the U.S. dollar rises.
C)   The United States imports more goods.
D)   Wages in the United States rise.E) None of the above
F) C) and D)

Question 8

Evan can grow both roses and carnations in his garden. His production possibility table is shown below. If he is currently producing 110 roses, his opportunity cost of producing 40 more roses is:   Number of roses  Number of carnations 015560135110109150781800\begin{array}{|c|c|}\hline 	ext { Number of roses } & 	ext { Number of carnations } \\hline 0 & 155 \\hline 60 & 135 \\hline 110 & 109 \\hline 150 & 78 \\hline 180 & 0 \\hline\end{array} Number of roses 060110150180​ Number of carnations 155135109780​​

Accepted Answer

A)   20 carnations
B)   26 carnations
C)   31 carnations
D)   78 carnations E) B) and D)
F) All of the above

Question 9

The graph below indicates that the economy can produce both:

Accepted Answer

A)   20 units of eggs and 5 units of rye, although this would not be efficient.
B)   10 units of eggs and 20 units of rye, although this would not be efficient.
C)   20 units of eggs and 5 units of rye, and this would be efficient.
D)   10 units of eggs and 20 units of rye, and this would be efficient.E) A) and B)
F) None of the above

Question 10

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

Accepted Answer

A)   upward-sloping.
B)   perfectly vertical.
C)   perfectly horizontal.
D)   downward-sloping.E) None of the above
F) All of the above

Question 11

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Accepted Answer

A)   All inputs are equally useful in the production of all goods.
B)   Some inputs are more useful in the production of certain goods.
C)   Some inputs are less useful in the production of certain goods.
D)   Each input is useful in the production of a limited number of goods.E) A) and B)
F) A) and C)

Exam 2: The Production Possibility Model, Trade, and Globalization

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Correct Answer
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Given a production possibility curve for good X (on the x-axis) and good Y (on the y-axis) , the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Correct Answer
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Correct Answer
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The graph below indicates that the economy can produce both:

Correct Answer
verified

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

Correct Answer
verified

Correct Answer
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In the graph shown, what change would increase production efficiency?

Correct Answer
verified

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Correct Answer
verified

Mexico has a comparative advantage in producing corn:

Correct Answer
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Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Correct Answer
verified

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Correct Answer
verified

Exam 2: The Production Possibility Model, Trade, and Globalization

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Correct AnswerverifiedShow Answer

Given a production possibility curve for good X (on the x-axis) and good Y (on the y-axis) , the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The graph below indicates that the economy can produce both:

Correct AnswerverifiedShow Answer

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the graph shown, what change would increase production efficiency?

Correct AnswerverifiedShow Answer

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Correct AnswerverifiedShow Answer

Mexico has a comparative advantage in producing corn:

Correct AnswerverifiedShow Answer

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Correct AnswerverifiedShow Answer

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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