Eco03L4

  • 1

    •

    The opportunity cost of moving from point a to point b in the figure


    eco03001.gif

    is zero.
    3/2 pairs of socks per sweater.
    3 pairs of socks.
    2 sweaters.

  • 2

    •

    An economy produces at point a on the PPF shown in the figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat


    eco03002.gif

    increases.
    is impossible to calculate without numbers on the axes.
    remain the same.
    decreases.

  • 3

    •

    The opportunity cost of producing a unit of consumption at point a in the figure ________________ point b.






    eco03003.gif

    is the same as
    is greater than at
    is less than at
    cannot be compared with

  • 4

    •

    Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. All the following are efficient except

    eco03004.gif

    the fifth ride should not be offered.
    only two rides should be offered per day.
    the third camel rides should be taken.
    the fourth ride should be taken.

  • 5

    •

    Two countries, Alpha and Beta, have identical production possibility frontiers. If Alpha produces at point a and Beta produces at point b,




    eco03005.gif

    Alpha's and Beta's economic growth rates will be the same.
    Alpha consumes less than Beta today, but it will grow faster than Beta.
    Beta's economic growth rate will exceed Alpha's.
    Beta's future consumption will be greater than Alpha's.

  • 6

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    As a country that has a bowed-out production possibility frontier produces more of the good in which it has a comparative advantage, the opportunity cost of a unit of that good

    remains the same.
    might increase or decrease.
    decreases.
    increases.

  • 7

    •

    Two countries, Blue Violet and Orange Rose, produce only two goods: teapots and coffeepots. The table gives their production possibilities. ____________has a comparative advantage in teapots and _____________ has a comparative advantage in coffeepots.

    eco03006.gif

    Orange Rose; Orange Rose
    Orange Rose; Blue Violet
    Blue Violet; Blue Violet
    Blue Violet; Orange Rose

  • 8

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    Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table gives their production possibilities:

    eco03007.gif

    Sweet Pansy has a comparative advantage in teapots.
    Sweet Pansy has an absolute advantage in teapots.
    Both have a comparative advantage in teapots.
    Blue Violet has a comparative advantage in teapots.

  • 9

    •

    Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table gives their production possibilities. With specialization and trade, Sweet Pansy produces _______________ and Blue Violet produces ________________.

    eco03008.gif

    150 coffeepots, 150 teapots
    150 teapots, 75 coffeepots
    100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots
    150 teapots and 150 coffeepots, nothing

  • 10

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    A country that has a comparative advantage in producing capital goods will __________________ a country that has a comparative advantage in consumption goods.

    specialize in producing capital goods and trade with
    reap all of the gains from trade with
    reap more of the gains from trade with
    grow faster than

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