Question 1 Anita is a wonderful baker and can bake 10 cakes in a day, but then h

Question

Question 1

Anita is a wonderful baker and can bake 10 cakes in a day, but then has no time left to make cookies. If she bakes only cookies, she can make 200 cookies in a day. John can make equally delicious cakes and cookies but can only make seven cakes or 100 cookies in a day. Based on this information, which of the following statements is true?

Anita has the comparative advantage in the production of cakes.

John has the comparative advantage in the production of cakes.

John has the absolute advantage in the production of cookies.

Anita has the comparative advantage in the production of both cakes and cookies.

1 points   

Question 2

Reference: Ref 2-9

(Figure: Countries A & B) Refer to the figure. According to the diagram about countries A & B, which of the following statements is correct?
I. Country A has a comparative advantage in Good Y.
II. Country B has an absolute advantage in both goods.
III. Country B has a comparative advantage in Good X.

I and II only

I and III only

II and III only

I, II, and III

1 points   

Question 3

Table: Production Possibilities for the United States and Mexico

50

10

40

5

Reference: Ref 2-5

(Table: Production Possibilities for the United States and Mexico) According to the table on Production Possibilities for the United States and Mexico, Mexico's opportunity cost of producing each ton of potatoes is ______, while the United States' opportunity cost of producing each ton of potatoes is ______.

0.125 tons of potatoes; 0.2 tons of potatoes

eight tons of corn; 0.2 tons of potatoes

eight tons of corn; five tons of corn

five tons of corn; 0.2 tons of corn

1 points   

Question 4

(Table: Excel Company) The table shows the results of Excel Company's market survey. If the market price of Excel computers is $1,200 each, how much total consumer surplus (in $) are the four consumers earning?
Table: Excel Company

Maximum willingness to pay

for Excel Personal Computers ($)

$380

$415

$345

$5,145

1 points   

Question 5

I only

II only

I, II, and III only

I and IV only

1 points   

Question 6

(Table: Equilibrium Quantity) Based on the table, the equilibrium quantity is:
Table: Equilibrium Quantity

Price

$10

100

400

8

150

350

6

200

300

4

250

250

2

300

200

10.

250.

100 and 400.

275.5.

1 points   

Question 7

Reference: Ref 3-4

(Figure: Supply Shifts) In the figure, the initial supply curve is S1. Producers engage in market speculation with the belief that the price of the good will increase in the near future. This would be represented in the figure by shifting the:

supply curve to S2, resulting in a lower quantity supplied at each price.

supply curve to S2, resulting in a higher quantity supplied at each price.

supply curve to S3, resulting in a lower quantity supplied at each price.

supply curve to S3, resulting in a higher quantity supplied at each price.

1 points   

Question 10

The sale of sugar will contribute to GDP when the buyer is

Krispy Kreme Doughnuts.

a mother who is baking cookies.

a Mexican food restaurant.

a grocery store chain.

1 points   

Question 11

Table: Three-Product Economy

30

$1,000

28

$995

100

10

150

15

200

20

210

20

Reference: Ref 6-2

(Table: Three-Product Economy) Suppose an economy produces only the three final goods listed in the table. What is the growth rate of real GDP in 2009 if 2008 is the base year?

Anita has the comparative advantage in the production of cakes.

John has the comparative advantage in the production of cakes.

John has the absolute advantage in the production of cookies.

Anita has the comparative advantage in the production of both cakes and cookies.

Explanation / Answer

1. Above is incorrect, correct answer is B

2. I, II, and III

3. Above is incorrect, correct answer is eight tons of corn; five tons of corn

4. Above is incorrect, correct answer is 380

5. I only

7. supply curve to S2, resulting in a lower quantity supplied at each price.

8. $12 and the equilibrium quantity falls to 70.

19. a price ceiling of $6

20. $2,500.

21. 4,000; 12,000

23. The economy is expected to boom thereby increasing investment returns

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