1.) A rock carving from ancient Norway depicts two identical people doing differ

Question

1.) A rock carving from ancient Norway depicts two identical people doing different jobs in the same boat: one uses a bow to hunt while the other paddles. How does this early example illustrate the benefits of trade?

A.) One learns to be very good at paddling, and one learns to be very good at hunting; this is an example of specialization and division of knowledge

B.) There is no trade in this example, since no goods are being exchanged.

C.) The paddler is stronger than the hunter, so the paddler sacrifices a lot by hunting; this is an example of comparative advantage

D.) One prefers to hunt, while the other prefers to paddle the boat; this is an example of diversified preferences

2.) The production possibilities frontier shows:

a.) the combinations of outputs a country can produce given its resouces and productivity

b.) the combinations of outputs and resources that a country possesses given its productivity.

c.) the maximum level of a country's productivity given its resources and outputs

d.) the combinations of inputs that a country has given its outputs and productivity

3.) What does the law of demand state?

a.) As the price of a good increases, consumers purchase less of that good.

b.) The demand for a good increases with the number of consumers in the market

c.) The supply of a good increases in proportion to the demand for it.

d.) As income increase, people consume more of all goods.

4.) The law of supply states that there is a _____ relationship between price and quantity __________.

a.) negative; demanded

b.) positive; demanded

c.) positive; supplied

d.) negative; supplied

6.) The supplt of ancient Egyptian papyrus manuscripts is probably:

a.) inelastic

b.) unit elastic

c.) elastic

d.) hyperelastic

8.) If the supply of a product is inelastic, a large price increase will:

a.) not have an effect on the quantity supplied

b.) only bring about a small increase to the quantity supplied

c.) cause the supplied curve to increase by a nontrivial amount

d.) cause a modest decrease in supply

9.) If the price of a good falls from $8 to $10, and the quantity supplied of it falls from 1,000 units to 600 units, the price elasticity of supply is:

a.) -2.25

b.) 2.25

c.) -2.67

d.) 2.67

Explanation / Answer

Q1. Answer is A. One learn to be verry good at paddling and one learns to be very good at hunting. This is an example of specialization and division of work. Q2. Answer is a. The combinations of outputs a country can produce given its resources and productivity. Q3. Answer is A. As the price of goods increases, consumers purchase less of that good. Q4. Answer is c. Positive; Supplied. Q6. Answer is a. Inelastic. Q8. Answer is b. only bring about a small increase to quantity supplied. Q9. There is a confusion in price data. It says falls but data reflect something opposite.

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