Mid1-Ma-A - ECO 201 MIDTERM 1 A Dr. Antonio Saravia...

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ECO 201 MIDTERM 1 A Dr. Antonio Saravia Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Use the accompanying table to answer the following questions: Table 3-5 Labor hours needed to make one unit of Amount produced in 40 hours Cheese Bread Cheese Bread England 1 2 40 20 Spain 2 8 20 5 ____ 1. Refer to Table 3-5. England has an absolute advantage in a. cheese and Spain has a comparative advantage in both goods. b. both goods and Spain has a comparative advantage in cheese. c. bread and Spain has a comparative advantage in neither good. d. bread and Spain has a comparative advantage in cheese. ____ 2. People who provide you with goods and services a. do so because they get something in return. b. are acting out of generosity. c. are acting because they like you. d. are required to do so by government. ____ 3. The difference between slope and elasticity is that a. there is no difference between slope and elasticity calculations. b. slope measures actual changes and elasticity measures percentage changes. c. slope measures percentage changes and elasticity measures actual changes. d. slope measures changes in quantity demanded more accurately than elasticity. ____ 4. Which of the following is NOT correct? a. Trade is good for nations. b. Trade is based on absolute advantage. c. Trade allows for specialization. d. Trade allows individuals to consume outside of their individual production possibilities curve. ____ 5. If the cross-price elasticity of demand is 1.25, then the two goods would be
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a. complements. b. substitutes. c.
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Mid1-Ma-A - ECO 201 MIDTERM 1 A Dr. Antonio Saravia...

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