Deck 2: Comparative Advantage

Question 1

If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then ________ has a(n)________ advantage in producing shoes.

A)Jane; absolute
B)Jane; comparative
C)Bob; absolute
D)Bob; comparative

Answer 1

Jane; absolute

Question 2

Larry has a comparative advantage over his classmates in writing term papers if he:

A)can write term papers faster than his classmates.
B)has an absolute advantage in writing term papers.
C)always earns an A on his term papers.
D)has a lower opportunity cost of writing term papers than his classmates.

Answer 2

has a lower opportunity cost of writing term papers than his classmates.

Question 3

According to the accompanying table, Martha has the absolute advantage in making: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes } & 60 \text {minutes } \\\hline\end{array}$$  

A)pies.
B)neither pies nor cakes.
C)cakes.
D)both pies and cakes.

Answer 3

neither pies nor cakes.

Question 4

Refer to the accompanying table. ________ has the comparative advantage in making pies and ________ the comparative advantage in making cakes. $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text { minutes} & 80 \text { minutes } \\\hline \text { Julia } & 50 \text {minutes } & 60 \text { minutes } \\\hline\end{array}$$  

A)Martha; Martha
B)Julia; Julia
C)Martha; Julia
D)Julia; Martha

Question 5

If Al has an absolute advantage over Beth in preparing meals, then:

A)it takes Al more time to prepare a meal than Beth.
B)the problem of scarcity applies to Beth but not to Al.
C)Al's opportunity cost of preparing a meal is lower than is Beth's.
D)Al can prepare more meals in a given time period than Beth.

Question 6

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. What is the opportunity cost to Dan of making a sandwich?

A)1/3 of a smoothie
B)3 smoothies
C)15 smoothies
D)5 smoothies

Question 7

An individual has an absolute advantage in producing pizzas if that individual:

A)has a lower opportunity cost of producing pizzas than anyone else.
B)can produce more pizzas in a given amount of time than anyone else.
C)has a higher opportunity cost of producing pizzas than anyone else.
D)charges the lowest price for pizzas.

Question 8

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

A)Tracy should specialize in sandwiches and smoothies.
B)Dan should specialize in smoothies, and Tracy should specialize in sandwiches.
C)Dan should specialize in sandwiches, and Tracy should specialize in smoothies.
D)Dan should specialize in both sandwiches and smoothies.

Question 9

If you have a comparative advantage in a particular task, then:

A)you complete it faster than other people.
B)you give up more to accomplish that task than do others.
C)you give up less to accomplish that task than do others.
D)you have specialized in that task, while others have not.

Question 10

Refer to the accompanying table. Based on their comparative advantage, Martha should specialize in making ________ while Julia should specialize in making ________. $$\begin{array} { | l | c | c | } \hline & \text { Tirue to Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text {minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \\\hline\end{array}$$  

A)pies; cakes
B)cakes; pies
C)neither pies nor cakes; both pies and cakes
D)both pies and cakes; neither pies nor cakes

Question 11

According to the accompanying table, Julia has the absolute advantage in making: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text {minutes } & 80 \text { minutes} \\\hline \text { Julia } & 50 \text { minutes} & 60 \text {minutes } \\\hline\end{array}$$  

A)pies.
B)neither pies nor cakes.
C)cakes.
D)both pies and cakes.

Question 12

Refer to the accompanying table. Martha's opportunity cost of making a cake is: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \\\hline\end{array}$$  

A)3/4 of a pie.
B)4/3 of a pie.
C)6 pies.
D)60 pies.

Question 13

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

A)Dan has the comparative advantage in smoothies, but Tracy has the absolute advantage in smoothies.
B)Dan has the comparative and absolute advantage in sandwiches.
C)Dan has the comparative and absolute advantage in smoothies.
D)Dan has the comparative advantage in sandwiches, but Tracy has the absolute advantage in sandwiches.

Question 14

If a nation has the lowest opportunity cost of producing a good, that nation has a(n)________ in the production of that good.

A)comparative advantage
B)absolute advantage
C)comparative advantage and an absolute advantage
D)absolute advantage and possibly a comparative advantage

Question 15

Refer to the accompanying table. Julia's opportunity cost of making a cake is: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text { minutes} & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes} & 60 \text { minutes} \\\hline\end{array}$$  

A)60 cakes.
B)6 cakes.
C)6/5 of a cake.
D)5/6 of a cake.

Question 16

If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:

A)Les has a comparative advantage in producing pants.
B)Les has an absolute advantage in producing pants.
C)Eva has a comparative advantage in producing pants.
D)Les has both comparative and absolute advantage in producing pants.

Question 17

Refer to the accompanying table. Martha's opportunity cost of making of a pie is: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes} & 60 \text { minutes } \\\hline\end{array}$$  

A)3/4 of a cake.
B)4/3 of a cake.
C)8 cakes.
D)80 cakes.

Question 18

If a nation can produce a more computers per year than any other nation, that nation has a(n)________ advantage in the production of computers.

A)comparative
B)absolute
C)relative
D)natural

Question 19

Which of the following statements is true?

A)Absolute advantage implies comparative advantage.
B)Comparative advantage does not require absolute advantage.
C)Absolute advantage requires comparative advantage.
D)Comparative advantage requires absolute advantage.

Question 20

Refer to the accompanying table. Julia's opportunity cost of making a pie is: $$\begin{array} { | l | c | c | } \hline & \text { Time ta Make a Pie } & \text { Tirne to Muke a Cake } \\\hline \text { Martha } & 60 \text {minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \\\hline\end{array}$$  

A)60 cakes.
B)6 cakes.
C)6/5 of a cake.
D)5/6 of a cake.

Question 21

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$  
Based on last month's data, ________ has an absolute advantage in selling cars and ________ has an absolute advantage in selling trucks.

A)Joe; Joe
B)Larry; Ralph
C)Ralph; Larry
D)Larry; Joe

Question 22

Refer to the accompanying table. ________ has the comparative advantage in making pizza, and ________ has the comparative advantage in delivering pizza. $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)Corey; Corey
B)Pat; Pat
C)Pat; Corey
D)Corey; Pat

Question 23

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$
 
Based on last month's data, Larry's opportunity cost of selling a truck is selling:

A)10 cars.
B)1/2 of a car.
C)1 car.
D)2 cars.

Question 24

Refer to the accompanying table. Pat's opportunity cost of delivering a pizza is making: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)12 pizzas.
B)10 pizzas.
C)3/2 of a pizza.
D)2/3 of a pizza.

Question 25

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$  
Based on last month's data, Joe's opportunity cost of selling a truck is selling:

A)9 cars.
B)1 car.
C)4 cars.
D)1/3 of a car.

Question 26

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. $$\begin{array} { | l | c | c | } \hline & \text { Ronrs Cleaned Per Haur } & \text { Meals Caked Per Haur } \\\hline \text { Lou } & 5 & 4 \\\hline \text { Alex } & 3 & 3 \\\hline\end{array}$$  
For Alex, the opportunity cost of cleaning one room is making ________ meal(s); for Lou the opportunity cost of cleaning one room is making ________ meal(s).

A)4; 4
B)1; 4/5
C)1; 5/4
D)3; 5

Question 27

Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. What is the opportunity cost to Cathy of making a cake?

A)2/3 of a pie.
B)1 pie.
C)1.5 pies.
D)1.33 pies.

Question 28

Refer to the accompanying table. Based on their comparative advantages, Pat should specialize in ________, and Corey should specialize in ________. $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)delivering pizza; making pizza
B)making pizza; delivering pizza
C)neither making pizza nor delivering pizza; both making pizza and delivering pizza
D)both making pizza and delivering pizza; neither making pizza nor delivering pizza

Question 29

Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?

A)Cathy should specialize in both pies and cakes.
B)There are no gains from specialization and trade.
C)Lewis should specialize in pies, and Cathy should specialize in cakes.
D)Cathy should specialize in pies, and Lewis should specialize in cakes.

Question 30

Refer to the accompanying table. Corey's opportunity cost of making of a pizza is delivering: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)2 pizzas.
B)3/2 of a pizza.
C)2/3 of a pizza.
D)1/2 of a pizza.

Question 31

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table:  
$\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$  
Based on last month's data, Joe's opportunity cost of selling a car is ________ than Ralph's, and Joe's opportunity cost of selling a car is ________ than Larry's.

A)less; greater
B)greater; less
C)less; less
D)greater; greater

Question 32

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$  
Based on last month's data, Ralph's opportunity cost of selling a truck is selling:

A)4 cars.
B)1/3 of a car.
C)3 cars.
D)1/4 of a car.

Question 33

Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?

A)Cathy has a comparative advantage in pies, and Lewis has an absolute advantage in pies.
B)Cathy has a comparative and absolute advantage in pies.
C)Lewis has a comparative and absolute advantage in pies.
D)Lewis has a comparative advantage in pies, and Cathy has an absolute advantage in pies.

Question 34

Refer to the accompanying table. Corey's opportunity cost of delivering of a pizza is making: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)6 pizzas.
B)12 pizzas.
C)2 pizzas.
D)1/2 of a pizza.

Question 35

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. $$\begin{array} { | l | c | c | } \hline & \text { Ronrs Cleaned Per Haur } & \text { Meals Caked Per Haur } \\\hline \text { Lou } & 5 & 4 \\\hline \text { Alex } & 3 & 3 \\\hline\end{array}$$  
If Alex and Lou work out an efficient arrangement for these two chores, then under that arrangement:

A)Alex and Lou each would do half of the cooking and half of the cleaning.
B)Alex would do all of the cleaning, while Lou would do all the cooking.
C)Lou would do all of the cleaning and all of the cooking.
D)Lou would do all of the cleaning, while Alex would do all of the cooking.

Question 36

Suppose it takes Paul 3 hours to bake a cake and 2 hours to mow the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn. Which of the following statements is correct?

A)Paul has the absolute advantage in baking cakes.
B)Paul has the comparative advantage in mowing the lawn.
C)Paul has the comparative advantage in baking cakes.
D)Paul has the absolute advantage in mowing the lawn.

Question 37

Refer to the accompanying table. Pat's opportunity cost of making a pizza is delivering: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)3 pizzas.
B)2 pizzas.
C)3/2 of a pizza.
D)2/3 of a pizza.

Question 38

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. $$\begin{array} { | l | c | c | } \hline & \text { Ronrs Cleaned Per Haur } & \text { Meals Caked Per Haur } \\\hline \text { Lou } & 5 & 4 \\\hline \text { Alex } & 3 & 3 \\\hline\end{array}$$ Which of the following is true?

A)Lou has both an absolute advantage and a comparative advantage over Alex in both tasks.
B)Alex has a comparative advantage over Lou in cleaning.
C)Lou has a comparative advantage over Alex in cleaning.
D)Alex has both an absolute advantage and a comparative advantage over Lou in both tasks.

Question 39

Refer to the accompanying table. According to the table, Pat has the absolute advantage in: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)making pizza.
B)neither making nor delivering pizza.
C)delivering pizza.
D)making and delivering pizza.

Question 40

Refer to the accompanying table. According to the table, Corey has the absolute advantage in: $\begin{array}{|l|r|r|}\hline & \text { Pizzas Made Per Hour } & \text { Pizzas Delivered Per Hour } \\\hline \text { Corey } & 12 & 6 \\\hline \text { Pat } & 10 & 15 \\\hline\end{array}$  

A)making pizza.
B)neither making nor delivering pizza.
C)delivering pizza.
D)making and delivering pizza.

Question 41

Suppose Karl divides his time between making birdhouses and growing artichokes. Karl's friend recently gave Karl some new woodworking tools that greatly reduced the amount of time it takes Karl to make each birdhouse, but the new tools had no impact on the amount of time it takes Karl to grow artichokes. Thus, the new tools ________ Karl's opportunity cost of growing artichokes.

A)had no effect on
B)decreased
C)increased
D)halved

Question 42

When Thurston catches 10 fish a day, he can gather a maximum of 40 coconuts, and when he catches 20 fish a day, he can gather a maximum of 30 coconuts. If Thurston's opportunity cost of producing each good increases as he produces more of it, and he decides to catch 30 fish a day, then the maximum number of coconuts he can gather must be:

A)equal to 20.
B)greater than 20.
C)greater than 10.
D)less than 20.

Question 43

Ginger and Maryann are lost in the jungle, where the only things to eat are mangoes and fish. Ginger can gather more mangoes per hour than Maryann and can also catch more fish per hour than can Maryann. Therefore:

A)there are no gains to specialization and trade for Ginger.
B)there are no gains to specialization and trade for Maryann.
C)Maryann should specialize in the activity for which she has a comparative advantage.
D)Ginger should specialize in the activity for which she has an absolute advantage.

Question 44

A country is most likely to have a comparative advantage in the production of cars if:

A)it imports most of the raw materials necessary to produce cars.
B)its citizens prefer driving cars to other forms of transportation.
C)it has strict environmental protection laws governing automobile emissions.
D)it has a relative abundance in the natural resources needed to produce cars.

Question 45

In general, individuals and nations should specialize in producing goods ________ other individuals or nations.

A)that they can produce more quickly than
B)that they can produce less quickly than
C)for which they have a lower opportunity cost compared to
D)for which they have a higher opportunity cost compared to

Question 46

Points that lie outside the production possibilities curve are ________, and points that lie inside the production possibilities curve are ________.

A)efficient; inefficient
B)inefficient; efficient
C)unattainable; attainable
D)attainable; unattainable

Question 47

The United States generally has a comparative advantage in the development of technology because it has:

A)large amounts of natural resources.
B)a disproportionate share of the world's best research universities.
C)the greatest need for new technology.
D)patent laws, which no other country has.

Question 48

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a:

A)production possibilities curve.
B)consumption possibilities curve.
C)production function.
D)supply curve.

Question 49

The United States was unable to maintain its dominance in the production of televisions because:

A)the highly technical skills necessary to produce televisions are greater in other countries.
B)the raw materials necessary to build televisions became scarce in the United States.
C)the product designs evolved too rapidly for engineers in the United States to keep up.
D)automated techniques allowed production to be outsourced to countries with less-skilled workers.

Question 50

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Which of the following statements is correct?

A)Ana has both an absolute advantage and the comparative advantage in fudge.
B)Ana has the comparative advantage in toffee, but Leo has the absolute advantage in toffee.
C)Ana has the comparative advantage in fudge, but Leo has the absolute advantage in fudge.
D)Leo has both the absolute advantage and the comparative advantage in fudge.

Question 51

If a country is producing at point where an increase in the production of one good requires a reduction in the production of another good, then it must be producing at an:

A)inefficient point.
B)efficient point.
C)unattainable point.
D)undesirable point.

Question 52

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: $\begin{array}{l|r|r|r}\hline & \text { Cars Sold } & \text { Trucks Sold } \\\hline \text { Larry } & 10 & 5 \\\hline \text { Joe } & 9 & 9 \\\hline \text { Ralph } & 3 & 12 \\\hline\end{array}$  
Based on last month's data, ________ should specialize in truck sales, and ________ should specialize in car sales.

A)Joe; Ralph
B)Ralph; Larry
C)Larry; Ralph
D)Larry; Joe

Question 53

In general, individuals and nations should specialize in producing those goods for which they have a(n):

A)absolute advantage.
B)comparative advantage.
C)absolutely comparative advantage.
D)absolute advantage and a comparative advantage.

Question 54

The emergence of English as the de facto world language ________ a comparative advantage in the production of books, movies and popular music.

A)has given English-speaking countries
B)has given non-English-speaking countries
C)has no effect on which country has
D)has given all countries

Question 55

The textbook notes that the last time a major league batter hit .400 was in 1941. This is because:

A)the average quality of batters has fallen.
B)the league imposes harsh penalties for steroid use.
C)specialization by pitchers, infielders, and outfielders has made it harder for batters to hit.
D)baseball diamonds have become larger.

Question 56

Suppose Colin brews beer and makes cheese. If Colin can increase his production of beer without decreasing his production of cheese, then he is producing at an:

A)inefficient point.
B)efficient point.
C)unattainable point.
D)ideal point.

Question 57

Points that lie beneath the production possibilities curve are:

A)unattainable and inefficient.
B)unattainable but efficient.
C)attainable but inefficient.
D)attainable and efficient.

Question 58

The production possibilities curve shows:

A)the minimum amount of one good that can be produced for every possible production level of the other good.
B)how increasing the resources used to produce one good increases the production of the other good.
C)the maximum amount of one good that can be produced for every possible production level of the other good.
D)how increasing the production of one good allows production of the other good to also rise.

Question 59

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. According to The Principle of Comparative Advantage, Ana and Leo will be able to produce more overall if:

A)Ana specializes in fudge and Leo specializes in toffee.
B)Leo specializes in fudge and Ana specializes in toffee.
C)both Leo and Ana specialize in fudge.
D)the Principle of Comparative Advantage does not hold in this example.

Question 60

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. What is Leo's opportunity cost of making a pound of fudge?

A)0.8 of a pound of toffee 
B)1.25 pounds of toffee 
C)4 pounds of toffee 
D)5 pounds of toffee

Question 61

Refer to the accompanying figure. For Chris, the opportunity cost of removing one bag of trash is planting:     

A)25 bulbs.
B)1/25 of a bulb.
C)3 bulbs.
D)1/3 of a bulb.

Question 62

Refer to the accompanying figure. If Pat and Chris each spend half their time on each task, then:     

A)the outcome will be efficient.
B)they will plant more bulbs and remove fewer bags of trash than if they had each specialized in the task at which they have a comparative advantage.
C)they will plant fewer bulbs and remove fewer bags of trash than if they each had specialized in the task at which they have a comparative advantage.
D)the outcome will be unattainable.

Question 63

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Point U is:

A)attainable.
B)efficient.
C)unattainable.
D)inefficient.

Question 64

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Point Y is ________, and point V is ________.

A)efficient; inefficient
B)inefficient; efficient
C)efficient; efficient
D)inefficient; inefficient

Question 65

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Of the labeled points, only ________ are attainable.

A)T and U
B)X, Y, and Z
C)W, X, Y, Z, and V
D)W, X, Y, Z, V, and T

Question 66

Refer to the accompanying figure. For Chris, the opportunity cost of planting one bulb is removing:     

A)25 bags of trash.
B)1/25 of a bag of trash.
C)3 bags of trash.
D)1/3 of a bag of trash.

Question 67

The accompanying figure shows the production possibilities curve for the island of Genovia:  
If 500 cars are produced in Genovia, a maximum of ________ tons of agricultural products can be produced.

A)50,000
B)25,000
C)45,000
D)40,000

Question 68

Refer to the accompanying figure. For Pat, the opportunity cost of planting one bulb is removing:  
    

A)20 bags of trash.
B)5 bags of trash.
C)1/20 of a bag of trash.
D)1/5 of a bag of trash.

Question 69

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Relative to point X, at point Y:

A)more dresses and more skirts are produced.
B)more skirts and fewer dresses are produced.
C)more dresses and fewer skirts are produced.
D)fewer skirts and fewer dresses are produced.

Question 70

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Suppose that Ana and Leo decide to work together as a team. Can they produce 2 pounds of fudge and 4.5 pounds of toffee each hour?

A)Yes, this point is both attainable and efficient.
B)No, this point is not attainable.
C)Yes, this point is attainable, but inefficient.
D)No, this point is not attainable and inefficient.

Question 71

Refer to the accompanying figure. For Pat, the opportunity cost of removing one bag of trash is planting:     

A)100 bulbs.
B)5 bulbs.
C)1/100 of a bulb.
D)1/5 of a bulb.

Question 72

Refer to the accompanying figure. If Pat and Chris were to specialize in the task in which each has a comparative advantage:     

A)Chris would plant bulbs and Pat would remove trash.
B)Chris would remove trash and Pat would plant bulbs.
C)Pat and Chris would each spend half of their time each task.
D)both Pat and Chris would plant bulbs because they both have an absolute advantage in that task.

Question 73

The accompanying figure shows the production possibilities curve for the island of Genovia:  
The opportunity cost of producing one ton of agricultural products in Genovia is:

A)1,000 cars.
B)1 car.
C)1/5 of a car.
D)1/50 of a car.

Question 74

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Point T is:

A)attainable.
B)efficient.
C)both attainable and efficient.
D)neither attainable nor efficient.

Question 75

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts. The maximum number of dresses that Becky can make in a day is represented by point:

A)U
B)T
C)V
D)W

Question 76

The accompanying figure shows the production possibilities curve for the island of Genovia: The opportunity cost of producing a car in Genovia is:

A)5,000 tons of agricultural products.
B)500 tons of agricultural products.
C)5 tons of agricultural products.
D)50 tons of agricultural products.

Question 77

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts. The maximum number of skirts that Becky can make in a day is represented by point:

A)U
B)T
C)V
D)Z

Question 78

The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.  
Of the labeled points, only ________ are efficient.

A)T and U
B)X, Y, and Z
C)W, X, Y, Z, and V
D)W, X, Y, Z, V, and T

Question 79

The slope of a production possibilities curve is ________ because ________.

A)negative; producing more of one good requires producing less of the other
B)negative; producing less of one good requires producing less of the other
C)positive; producing more of one good requires producing more of the other
D)positive; producing more of one good requires producing less of the other

Question 80

The downward slope of the production possibilities curve illustrates the:

A)Scarcity Principle.
B)Cost-Benefit Principle.
C)Incentive Principle.
D)Principle of Comparative Advantage.