11. A shift in the production possibilities frontier from DC to EC in Figure 2-6
ID: 1248566 • Letter: 1
Question
11. A shift in the production possibilities frontier from DC to EC in Figure 2-6 could be due to a
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
12. Suppose that the United States has an absolute advantage over Mexico in producing both agricultural and manufactured goods. In the U. S., the opportunity cost of 1 unit of agricultural output is 2 units of manufactured goods. In Mexico, the opportunity cost of 1 unit of agricultural output is 1.5 units of manufactured goods. Total production in the U. S. and Mexico will be maximized if
a.
the U. S. specializes in both types of output
b.
Mexico specializes in both types of output
c.
the U. S. specializes in agricultural goods and Mexico specializes in manufactured goods
d.
the U. S. specializes in manufactured goods and Mexico specializes in agricultural goods
e.
each country achieves self-sufficiency
13. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
a.
Bill has both an absolute advantage and a comparative advantage in cooking dinner.
b.
Bill has both an absolute advantage and a comparative advantage in mowing the lawn.
c.
Eileen has both an absolute advantage and a comparative advantage in cooking dinner.
d.
Eileen has both an absolute advantage and a comparative advantage in mowing the lawn.
e.
Bill has the comparative advantage in both cooking dinner and mowing the lawn.
14. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
a.
Bill should specialize in both tasks.
b.
Bill should specialize in cooking dinner; Eileen should specialize in mowing the lawn.
c.
Bill should specialize in mowing the lawn; Eileen should specialize in cooking dinner.
d.
Eileen should specialize in both tasks.
e.
neither person should specialize.
15. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Bill's opportunity cost of mowing the lawn is
a.
1/2 of a dinner
b.
2 dinners
c.
3/4 of a dinner
d.
1-1/3 dinners
e.
2-2/3 dinners
16. A person has a comparative advantage if
a.
she can produce everything more cheaply than her co-worker can
b.
she can produce everything at a faster rate than her co-worker can
c.
she can produce a good with a smaller opportunity cost than her co-worker can
d.
she sees through corporate and government manipulation
e.
she gets rich through inheritance
Figure 2-12
Bob
Tom
Political Jokes per day
10
11
Celebrity Jokes per day
2
12
17. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table they should
a.
have Bob specialize in both political and celebrity jokes
b.
have Tom specialize in both political and celebrity jokes
c.
cooperate on the writing of both political and celebrity jokes
d.
have Bob write political jokes and Tom write celebrity jokes
e.
have Tom write political jokes and Bob write celebrity jokes
18. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table you can tell that
a.
Bob has an absolute advantage in both political and celebrity jokes
b.
Tom has an absolute advantage in both political and celebrity jokes
c.
Bob has an comparative advantage in both political and celebrity jokes
d.
Tom has an comparative advantage in both political and celebrity jokes
e.
there are no gains from specialization
19. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table you can tell that
a.
Bob has an absolute advantage in both political and celebrity jokes
b.
Tom has an absolute advantage in both political and celebrity jokes but a comparative advantage in political jokes only
c.
Bob has an comparative advantage in both political and celebrity jokes
d.
Tom has an comparative advantage in both political and celebrity jokes
e.
Tom has an absolute advantage in both political and celebrity jokes but a comparative advantage in celebrity jokes only
20. In a market system, resources are allocated by
a.
the orders of authority
b.
traditional practices
c.
prices
d.
absolute advantage
e.
production possibilities frontiers
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
Explanation / Answer
11. A shift in the production possibilities frontier from DC to EC in Figure 2-6 could be due to a
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
12. Suppose that the United States has an absolute advantage over Mexico in producing both agricultural and manufactured goods. In the U. S., the opportunity cost of 1 unit of agricultural output is 2 units of manufactured goods. In Mexico, the opportunity cost of 1 unit of agricultural output is 1.5 units of manufactured goods. Total production in the U. S. and Mexico will be maximized if
a.
the U. S. specializes in both types of output
b.
Mexico specializes in both types of output
c.
the U. S. specializes in agricultural goods and Mexico specializes in manufactured goods
d.
the U. S. specializes in manufactured goods and Mexico specializes in agricultural goods
e.
each country achieves self-sufficiency
13. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
a.
Bill has both an absolute advantage and a comparative advantage in cooking dinner.
b.
Bill has both an absolute advantage and a comparative advantage in mowing the lawn.
c.
Eileen has both an absolute advantage and a comparative advantage in cooking dinner.
d.
Eileen has both an absolute advantage and a comparative advantage in mowing the lawn.
e.
Bill has the comparative advantage in both cooking dinner and mowing the lawn.
14. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is correct?
a.
Bill should specialize in both tasks.
b.
Bill should specialize in cooking dinner; Eileen should specialize in mowing the lawn.
c.
Bill should specialize in mowing the lawn; Eileen should specialize in cooking dinner.
d.
Eileen should specialize in both tasks.
e.
neither person should specialize.
15. Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours. Bill's opportunity cost of mowing the lawn is
a.
1/2 of a dinner
b.
2 dinners
c.
3/4 of a dinner
d.
1-1/3 dinners
e.
2-2/3 dinners
16. A person has a comparative advantage if
a.
she can produce everything more cheaply than her co-worker can
b.
she can produce everything at a faster rate than her co-worker can
c.
she can produce a good with a smaller opportunity cost than her co-worker can
d.
she sees through corporate and government manipulation
e.
she gets rich through inheritance
Figure 2-12
Bob
Tom
Political Jokes per day
10
11
Celebrity Jokes per day
2
12
17. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table they should
a.
have Bob specialize in both political and celebrity jokes
b.
have Tom specialize in both political and celebrity jokes
c.
cooperate on the writing of both political and celebrity jokes
d.
have Bob write political jokes and Tom write celebrity jokes
e.
have Tom write political jokes and Bob write celebrity jokes
18. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table you can tell that
a.
Bob has an absolute advantage in both political and celebrity jokes
b.
Tom has an absolute advantage in both political and celebrity jokes
c.
Bob has an comparative advantage in both political and celebrity jokes
d.
Tom has an comparative advantage in both political and celebrity jokes
e.
there are no gains from specialization
19. Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are two types of jokes, political jokes and jokes about celebrities. The number of jokes that can be produced by each person in each category are listed in Figure 2-12. From this table you can tell that
a.
Bob has an absolute advantage in both political and celebrity jokes
b.
Tom has an absolute advantage in both political and celebrity jokes but a comparative advantage in political jokes only
c.
Bob has an comparative advantage in both political and celebrity jokes
d.
Tom has an comparative advantage in both political and celebrity jokes
e.
Tom has an absolute advantage in both political and celebrity jokes but a comparative advantage in celebrity jokes only
20. In a market system, resources are allocated by
a.
the orders of authority
b.
traditional practices
c.
prices
d.
absolute advantage
e.
production possibilities frontiers
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
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