FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 3: The Economic Problem

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

If a country has

A) an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good.
B) an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good.
C) a comparative advantage in production of a good, it must also have an absolute advantage in producing that good.
D) an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good.
E) None of the above answers is correct.

F) A) and B)
G) None of the above

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Given the information in the figure above, Joe can benefit from trade as far as the price at which he buys Liz's smoothies is

A) below 5 salads per smoothie.
B) not higher than 2 salads per smoothie.
C) not lower than 2 salads per smoothie.
D) not lower than 1 salad per smoothie.
E) not higher than 4 salads per smoothie.

F) B) and E)
G) A) and B)

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Having a comparative advantage means a nation can

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point E. What would be the opportunity cost to increase the production of wine to 9 thousand bottles?

-The figure above shows the production possibilities frontier for a country.A combination of 4 million gallons of milk and 4 million gallons of ice cream is

$\begin{array}{cccc}\begin{array}{c}\text { Production } \\\text { point }\end{array} & \begin{array}{c}\text { Beef } \\\text { (pounds) }\end{array} && \begin{array}{c}\text { Wheat } \\\text { (bushels) }\end{array} \\\hline A & 0 & \text { and } & 9 \\B & 2 & \text { and } & 7 \\C & 4 & \text { and } & 4 \\D & 6 & \text { and } & 0\end{array}$ -The table above presents the production possibilities of Farmer Brown.Use these data to calculate Farmer Brown's opportunity cost of additional beef as Farmer Brown moves from point A to B to C to D.Also use the data to calculate Farmer Brown's opportunity cost of additional wheat as Farmer Brown moves from point D to C to B to A.Based on these costs, does Farmer Brown use resources that are more productive in one activity than the other or are they equally productive in both uses? Explain your answer.

While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range) is

The opportunity cost of producing one more unit of a good is calculated by dividing the

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D, then the

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What is the opportunity cost of increasing the production of rice to 15 tons?

The opportunity cost of one more slice of pizza in terms of sodas is the

$\begin{array} { c c c c c c c c } &{ \text { Anaconda } } & &{ \text { Bear } } \\\hline \begin{array} { c } \text { Production } \\\text { point }\end{array} & \begin{array} { c } \text { Corn } \\\text { (tons) }\end{array} & \begin{array} { c } \text { Shoes } \\\text { (number) }\end{array} & \begin{array} { c } \text { Production Corn } \\\text { point }\end{array} & \begin{array} { c } \text { Cons } \\\text { (tons) }\end{array} & \begin{array} { c } \text { Shoes } \\\text { (number) }\end{array} \\\hline \text { A } & 0 & \text { and } & 700 & \text { A } & 0 & \text { and } & 1000 \\\text { B } & 1 & \text { and } & 650 & \text { B } & 1 & \text { and } & 900 \\\text { C } & 2 & \text { and } & 550 & \text { C } & 2 & \text { and } & 700 \\\text { D } & 3 & \text { and } & 350 & \text { D } & 3 & \text { and } & 400 \\\text { E } & 4 & \text { and } & 0 & \text { E } & 4 & \text { and } & 0 \\\hline\end{array}$ -The table above gives the production possibilities frontier for two countries, Anaconda and Bear.This table shows that

A country produces only apples and bananas.Moving from point A to point B along its production possibilities frontier, 5 apples are gained and 4 bananas are forgone.What is the opportunity cost of an apple?

Specialization and trade make a country better off because with trade the country can consume at a point

A movement from one point on a production possibilities frontier to another represents

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ and an absolute advantage in ________.

Which of the following statements is correct?

$\begin{array}{cccc}\begin{array}{c}\text { Production } \\\text { point }\end{array} & \begin{array}{c}\text { Milk } \\\text { (gallons) }\end{array} & & \begin{array}{c}\text { Shirts } \\\text { (numbers) }\end{array} \\\hline \text { A } & 0 & \text { and } & 100 \\\text { B } & 2 & \text { and } & 90 \\\text { C } & 4 & \text { and } & 70 \\\text { D } & 6 & \text { and } & 40 \\\text { E } & 8 & \text { and } & 0\end{array}$ -A (very, very small) country produces milk and shirts and its production possibilities frontier is in the table above. a. The nation is currently producing at point B.What is the opportunity cost of two additional gallons of milk? At point C? At point D? What do your results show? b. Suppose the nation is initially producing 4 gallons of milk and 40 shirts.What is the opportunity cost of 2 additional gallons of milk? Explain your answer.

-The figure above represents the production possibilities frontier for a country. a. The nation is currently producing at point B and wants to move to point C.What is the opportunity cost of the move? b. The nation is currently producing at point B and wants to move to point A.What is the opportunity cost of the move? c. The nation is currently producing at point D and wants to move to point B.What is the opportunity cost of the move?

-Suppose India and France have the same PPF, shown in the figure above.Based on their current production points, India's most likely future PPF is ________ and France's most likely future PPF is ________.