Question 1

Refer to the figure shown, which represents the production possibilities frontiers (PPFs)  for Countries A and B. The slope of Country A's PPF is _____ and the slope of Country B's PPF is _____.

Accepted Answer

A)   −5; −3
B)   −30; −3
C)   −1/5; −1/3
D)   1/5; 1/3E) A) and D)
F) B) and C)

Question 2

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Accepted Answer

A)   It is lower than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
B)   It is higher than that of Country B; Country A should specialize in cars and trade with Country B for trucks.
C)   It is the same as that of Country B; Country A will not benefit from trade and should refrain.
D)   It should have no effect on Country A's decision to trade; absolute advantage drives that decision.E) None of the above
F) C) and D)

Question 3

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Country B specializes in producing tomatoes and Country A specializes in producing bananas. What terms of trade would both countries be willing to agree to?

Accepted Answer

A)   One tomato for one banana
B)   One tomato for two bananas
C)   One tomato for four bananas
D)   One tomato for six bananasE) C) and D)
F) B) and C)

Question 4

Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Accepted Answer

A)   The United States has an absolute advantage at producing computers and Mexico has an absolute advantage at producing airplanes.
B)   The United States has an absolute advantage at producing airplanes and Mexico has an absolute advantage at producing computers.
C)   The United States has an absolute advantage at producing both airplanes and computers.
D)   Mexico has an absolute advantage at producing both airplanes and computers.E) A) and D)
F) B) and C)

Question 5

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is true?Point A is unattainable.Point B is inefficient.Points A and D are inefficient.Points C and D are attainable.

Accepted Answer

A)   I and II only
B)   III only
C)   II and IV only
D)   IV onlyE) B) and C)
F) B) and D) D

Question 6

When an economist says that a country can experience gains from trade, this means it can:

Accepted Answer

A)   consume at a point outside its production possibilities frontier.
B)   increase its exports.
C)   increase the efficiency of its production.
D)   experience a bowed-out production possibilities frontier.E) B) and D)
F) B) and C)

Question 7

Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Accepted Answer

A)   (15 airplanes, 15 trucks) 
B)   (20 airplanes, 40 trucks) 
C)   (10 airplanes, 30 trucks) 
D)   (5 airplanes, 30 trucks) E) A) and B)
F) All of the above

Question 8

Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Accepted Answer

A)   decreases.
B)   stays the same.
C)   increases.
D)   decreases then increases.E) None of the above
F) A) and B)

Question 9

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Accepted Answer

A)   The United States has an absolute advantage at producing both shoes and apples.
B)   Canada has an absolute advantage at producing both shoes and apples.
C)   The United States has an absolute advantage at producing shoes and Canada has an absolute advantage at producing apples.
D)   Canada has an absolute advantage at producing shoes and the United States has an absolute advantage at producing apples.E) All of the above
F) B) and C)

Question 10

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country B, the trade-off to producing one tomato is:

Accepted Answer

A)   2 bananas.
B)   3 bananas.
C)   4 bananas.
D)   5 bananas.E) C) and D)
F) None of the above

Question 11

When nations trade, the result would most likely be a(n) :

Accepted Answer

A)   increase in total production, which would benefit every nation involved.
B)   increase in total production, which would benefit only the wealthiest nations.
C)   decrease in total production, which would benefit only the wealthiest nations.
D)   decrease in total production, which would benefit countries that do not have an absolute advantage.E) All of the above
F) B) and C)

Question 12

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. At the end of the day, if Jerry was efficient with his resources, he will have produced:

Accepted Answer

A)   12 chairs and 0 tables.
B)   10 chairs and 2 tables.
C)   8 chairs and 2 tables.
D)   6 chairs and 2 tables.E) None of the above
F) A) and D)

Question 13

Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Accepted Answer

A)   IV
B)   III
C)   II
D)   IE) A) and B)
F) B) and C)

Question 14

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country A is:

Accepted Answer

A)   30 cars.
B)   6 trucks.
C)   5 cars.
D)   3 cars.E) A) and B)
F) None of the above

Question 15

Consider the production possibilities frontier displayed in the figure shown. Which points are efficient and attainable with existing resources?

Accepted Answer

A)   Only point II
B)   Only point I
C)   Points I and IV
D)   Points I, III, and IVE) B) and C)
F) A) and B) C

Question 16

3 to PPF1? A)  A tornado B)  More workers C)  A desire to read less books D)  Better sewing technology" class="answers-bank-image d-inline" rel="preload" > Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF3 to PPF1?

Accepted Answer

A)   A tornado
B)   More workers
C)   A desire to read less books
D)   Better sewing technologyE) A) and C)
F) A) and B)

Question 17

Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Accepted Answer

A)   decreases.
B)   stays the same.
C)   increases.
D)   decreases then increases.E) A) and B)
F) None of the above

Question 18

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Accepted Answer

A)   (1,000 jets, 5,000 cars)  and (900 jets, 10,000 cars) 
B)   (1,000 jets, 5,000 cars)  and (900 jets, 15,000 cars) 
C)   (2,500 jets, 2,000 cars)  and (2,300 jets, 20,000 cars) 
D)   (2,500 jets, 2,000 cars)  and (2,300 jets, 3,000 cars) E) C) and D)
F) None of the above

Question 19

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:

Accepted Answer

A)   12 cars.
B)   4 trucks.
C)   1.5 cars
D)   3 cars.E) C) and D)
F) B) and D)

Question 20

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one bushel of wheat is:

Accepted Answer

A)   30 computers.
B)   5 computers.
C)   6 computers.
D)   1/5 computers.E) All of the above
F) B) and D) B

Exam 2: Specializationand Exchange

Refer to the figure shown, which represents the production possibilities frontiers (PPFs) for Countries A and B. The slope of Country A's PPF is _ and the slope of Country B's PPF is _.

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Correct Answer
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Correct Answer
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Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is true?Point A is unattainable.Point B is inefficient.Points A and D are inefficient.Points C and D are attainable.

Correct Answer
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D

When an economist says that a country can experience gains from trade, this means it can:

Correct Answer
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Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Correct Answer
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Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Correct Answer
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Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Correct Answer
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Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country B, the trade-off to producing one tomato is:

Correct Answer
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When nations trade, the result would most likely be a(n) :

Correct Answer
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Correct Answer
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Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country A is:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. Which points are efficient and attainable with existing resources?

Correct Answer
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C

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₃ to PPF₁?

Correct Answer
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Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Correct Answer
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Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Correct Answer
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Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:

Correct Answer
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Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one bushel of wheat is:

Correct Answer
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B

Exam 2: Specializationand Exchange

Refer to the figure shown, which represents the production possibilities frontiers (PPFs) for Countries A and B. The slope of Country A's PPF is _____ and the slope of Country B's PPF is _____.

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. After examining the production possibilities of each country, what can we surmise about the opportunity cost of a car for Country A?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that, given the same number of workers, the United States can produce five times as many computers or ten times as many airplanes as Mexico. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which of the following statements is true?Point A is unattainable.Point B is inefficient.Points A and D are inefficient.Points C and D are attainable.

Correct AnswerverifiedD

When an economist says that a country can experience gains from trade, this means it can:

Correct AnswerverifiedShow Answer

Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown. As more and more cigars are produced, the opportunity cost of producing more cigars:

Correct AnswerverifiedShow Answer

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country B, the trade-off to producing one tomato is:

Correct AnswerverifiedShow Answer

When nations trade, the result would most likely be a(n) :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Considering the production possibilities frontier displayed in the figure shown, producing at point ______ would be inefficient.

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country A is:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. Which points are efficient and attainable with existing resources?

Correct AnswerverifiedC

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF3 to PPF1?

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier in the figure shown. As more and more cars are produced, the opportunity cost of producing more cars:

Correct AnswerverifiedShow Answer

Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production possibilities frontier, which of the following describes possible combinations of output?

Correct AnswerverifiedShow Answer

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:

Correct AnswerverifiedShow Answer

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one bushel of wheat is:

Correct AnswerverifiedB

Refer to the figure shown, which represents the production possibilities frontiers (PPFs) for Countries A and B. The slope of Country A's PPF is _ and the slope of Country B's PPF is _.

Correct Answer
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D

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C

Consider a society facing the production possibilities frontiers in the figure shown. Out of the options provided, which is the most likely cause of a society moving from PPF₃ to PPF₁?

Correct Answer
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B