Question 1

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Accepted Answer

The answer of Hank requires 1 hour to cut the...

Question 2

Which of the following statements is correct?
i.As the economy grows,the opportunity costs of economic growth decrease.
ii.Economic growth has no opportunity cost.
iii.The opportunity cost of economic growth is current consumption forgone.

Accepted Answer

According to the concept of opportunity cost, in order to achieve economic growth, a society must produce more goods and services by diverting resources from producing other goods and services. This diversion causes an opportunity cost, which is the current consumption forgone. Therefore, statement iii is correct while statement i and ii are incorrect.

Question 3

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,India's most likely future PPF is ________ and France's most likely future PPF is ________.

Accepted Answer

India's future PPF is likely to shift outward to PPF2 if it is currently producing more capital goods, which suggests investment in future production capabilities. France's future PPF might shift to PPF1 if it is producing more consumer goods, indicating less investment in future production capabilities compared to India.

Question 4

If a nation devotes a larger share of its current production to consumption goods,then

Accepted Answer

Investing a larger share of current production in consumption goods means less is being invested in capital goods, which are necessary for future production capabilities and economic growth. Therefore, economic growth will slow down.

Question 5

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

Accepted Answer

The answer of 
-Suppose that Germany,France,Estonia,and India all have the...

Question 6

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

Accepted Answer

Even if Toni has an absolute advantage in both sewing and ironing, we need to know their opportunity costs for each task in order to determine their comparative advantage and to decide which task they should specialize in. Therefore, the best option is A, which suggests that they might benefit from trading, but more information is needed to determine their specialization.

Question 7

If Wendy can produce more of all goods than Tommy in an hour,then

Accepted Answer

Wendy having the ability to produce more of all goods than Tommy in an hour means she has an absolute advantage in producing those goods. Comparative advantage, on the other hand, is about who can produce goods at a lower opportunity cost, not necessarily more of them. Absolute advantage refers to the ability to produce more of a good or service with the same amount of resources.

Question 8

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

Accepted Answer

India is most likely to expand its PPF because it is currently operating inside its PPF, indicating it has unused resources or inefficiencies. Once these are addressed, it can move towards its PPF, effectively expanding it.

Question 9

If a country has

Accepted Answer

Just because a country has an absolute advantage in producing a good, it does not necessarily mean that it has a comparative advantage. Comparative advantage takes into account the opportunity cost of producing one good versus another. Even if a country can produce a good more efficiently than another country, it may still choose to specialize in producing a different good where it has a lower opportunity cost. Therefore, option B is the correct answer.

Question 10

Other things equal,if Mexico devotes more resources to train its population than Spain,

Accepted Answer

Investing more resources in training the population will lead to an increase in human capital, which in turn, will enhance the productivity and efficiency of the economy. As a result, Mexico will be able to produce more goods and services than Spain, meaning it will grow faster than Spain over time.

Question 11

When Mik has an absolute advantage in the production of two goods over Tommy,Mik

Accepted Answer

When Mik has an absolute advantage in the production of two goods over Tommy, it means that Mik can produce both the goods with fewer resources than Tommy. Therefore, Mik is more productive in producing both the goods than Tommy. Since Mik can produce both goods more efficiently than Tommy, Mik can specialize in producing the good in which he has the greatest absolute advantage, and then trade with Tommy for the other good. This would result in both Mik and Tommy being better off than if they were to produce both goods on their own without specialization and trade.

Question 12

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,India is most likely to expand its PPF to

Accepted Answer

The answer of 
-Suppose that Germany,France,Estonia,and India all have the...

Question 13

When a country's production possibilities frontier shifts outward over time,the country is experiencing

Accepted Answer

An outward shift of the production possibilities frontier represents an increase in potential output, which is only possible through economic growth. This growth may be due to improved technology or increased availability of resources, but it always represents a higher level of production than before. Therefore, choice (B) is the correct answer.

Question 14

To increase its economic growth,a nation should

Accepted Answer

Encouraging education improves the quality of labor, leading to higher productivity and economic growth.

Question 15

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

Accepted Answer

Germany is most likely to expand its PPF to PPF3, as it represents a higher level of production possibilities, indicating economic growth or increased efficiency.

Question 16

Mac can bake more cookies than Monica per hour.It must be true that

Accepted Answer

Mac having the ability to bake more cookies per hour than Monica directly implies that Mac has an absolute advantage in baking cookies. Comparative advantage, on the other hand, involves the relative efficiency of producing goods considering opportunity costs, which is not directly addressed by the information given.

Question 17

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

Accepted Answer

Economic growth typically requires investment in new capital, technology, and education. This means diverting resources away from current consumption, which is the opportunity cost of economic growth. However, the benefit of economic growth is that it leads to increased future consumption and higher standards of living. Thus, the best answer is C, where the opportunity cost is decreased current consumption and the benefit is increased future consumption.

Question 18

-In the table above,how many jackets must Mary forgo for every dress she makes?

Accepted Answer

The answer of 
-In the table above,how many jackets must...

Question 19

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

Accepted Answer

Mary has the absolute advantage in producing both goods because she can produce more of each good (12 chairs and 22 lamps) in a week compared to John (10 chairs and 20 lamps).

Question 20

The United States can use all its resources to produce 250 DVDs or 500 shoes.China can use all of its resources to produce 30 DVDs or 300 shoes.The opportunity cost of producing a DVD in the United States is

Accepted Answer

The opportunity cost of producing one DVD in the United States is the amount of shoes that could have been produced instead. Given the production possibilities, the U.S. can produce 250 DVDs or 500 shoes, meaning for each DVD produced, 500/250 = 2 shoes are forgone. Hence, the opportunity cost of producing a DVD in the U.S. is 2 shoes.

Quiz 3: The Economic Problem

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Which of the following statements is correct? i.As the economy grows,the opportunity costs of economic growth decrease. ii.Economic growth has no opportunity cost. iii.The opportunity cost of economic growth is current consumption forgone.

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,India's most likely future PPF is and France's most likely future PPF is .

If a nation devotes a larger share of its current production to consumption goods,then

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

If Wendy can produce more of all goods than Tommy in an hour,then

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

If a country has

Other things equal,if Mexico devotes more resources to train its population than Spain,

When Mik has an absolute advantage in the production of two goods over Tommy,Mik

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,India is most likely to expand its PPF to

When a country's production possibilities frontier shifts outward over time,the country is experiencing

To increase its economic growth,a nation should

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

Mac can bake more cookies than Monica per hour.It must be true that

The opportunity cost of economic growth is and the benefit of economic growth is .

-In the table above,how many jackets must Mary forgo for every dress she makes?

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

The United States can use all its resources to produce 250 DVDs or 500 shoes.China can use all of its resources to produce 30 DVDs or 300 shoes.The opportunity cost of producing a DVD in the United States is