Answer Bank 1 - Multiple Choice Identify the choice that...

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Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. If Toni has an absolute advantage in both sewing and ironing when compared to Tom, then a. they might benefit from trading, but we need more information to determine in which task they should specialize. b. neither Toni nor Tom can benefit from trading with each other. c. Toni should specialize in sewing and Tom should specialize in ironing. d. Toni cannot benefit from trading with Tom but Tom can benefit from trading with Toni. e. Tom cannot benefit from trading with Toni but Toni can benefit from trading with Tom. ____ 2. As technology advances, a. all opportunity costs decrease. b. the PPF shifts outward. c. a country moves toward the midpoint along its PPF and can produce more of both goods. d. all opportunity costs increase. e. the PPF shifts inward because unemployment occurs. ____ 3. Relative to Al, Joe has ____ if Joe can produce a good at a lower opportunity cost than Al. a. a comparative advantage b. more production efficiency c. more allocative efficiency d. a marginal benefit e. a free lunch ____ 4. The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The opportunity cost of moving from ____ is greater for _____. a. point A to point B ; Anaconda b. point B to point A ; Bear c. point D to point E ; Bear d. point E to point D ; Bear e. any point to any other point; Bear ____ 5. The table above gives the production possibilities frontier for two countries, Anaconda and Bear. This table shows that a. when Anaconda and Bear specialize and trade, Anaconda should specialize in the production of shoes . b. when Anaconda and Bear specialize and trade, Anaconda should produce at its production point E . c. Anaconda has an absolute advantage in the production of corn and shoes. d. Bear can consume no more than 2 bushels of corn and 700 pairs of shoes. e. Bear is unable to gain from trade with Anaconda.
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____ 6. The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The table shows that a. Bear achieves allocative efficiency at its production point A . b. Anaconda achieves allocative efficiency at its production point A . c. Anaconda has a comparative advantage in the production of corn. d. Bear has an absolute advantage in the production of both goods. e. Bear is production efficient if it produces 2 tons of corn and 400 shoes. ____ 7. Items that are purchased by individuals for their own enjoyment are called a. consumption goods and services. b. capital goods. c. government goods and services. d. exports of goods and services. e. private goods. ____ 8. Which of the following is a consumption good or service? a.
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This note was uploaded on 07/12/2009 for the course ECN 1211 taught by Professor Maloney during the Spring '09 term at Fairleigh Dickinson.

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Answer Bank 1 - Multiple Choice Identify the choice that...

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