quiz 1 practice questions

quiz 1 practice questions - Q1. George and Carolyn each...

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Unformatted text preview: Q1. George and Carolyn each have 10 hours a day they can spend producing either cookies or milkshakes as follows: Cookies (per hour) Milkshakes (per hour) George 5 10 Carolyn 2 6 Answerthefollowingquestionsusingtheinformationabove: 1.Circlethecorrectanswerineach:(1pointeach) a. George/Carolynhasanabsoluteadvantageinproducingcookies. b. George/Carolynhasanabsoluteadvantageinproducingmilkshakes. c. George/Carolynhasacomparativeadvantageinproducingcookies. d. George/Carolynhasacomparativeadvantageinproducingmilkshakes. 2.GeorgeandCarolynwilltradecookiesformilkshakeswitheachotheraslongasthepriceof1cookieis between__2___and__3____milkshakes.2points 3.IfGeorgeandCarolynmarry(ormerge)whatwilltheirPPFlooklike?Drawithere,withcookieson thehorizontalaxis: Answer:akinkedppfwithpointsat(70cookies,0milkshakes)(50C,60M)&(0C,160M) 3points:1foreachpoint Q2. SupposethattheUSAandJapanhaveonly1workereach.Thefollowingtablesummarizesthenumberof moviesorcarsthateachworkercanproduceinaweek.Usethistabletoanswerthefollowing questions: Movies (per week) 5 2 USA Japan Cars (per week) 3 1 a. Whichcountryhasanabsoluteadvantageincars?_______USA(1point)_____ a. Whichcountryhasacomparativeadvantageincars?_______USA(1point)_____ b. IfJapan&USAmergewhatwilltheir(weekly)PPFlooklike?Drawithere: PPFwithonekink.Total:4points 1foreachpoint(7,0 2,3 0,4) 1forlabelingaxis(movies,cars) c. Giventhisdata,ifJapan&USAmergewhatwouldbetheirjointsupplyofcars(intermsof movies)?Drawithere: CommenttoR.I.s:workingonProf.Spiegel’ssectionsdiffered.Butansweristhesame.  Astepfunctionwith2steps: Step1:5/3from0to3cars Step2:2from3to4cars. Total:3points 1foreachstep 1forlabelingaxis. Q3. 5 Joe’s PPF 4 3 Pa nt s (p er ho ur ) Jill’s PPF 2 1 1 2 3 4 5 Shirts (per hour) 1) Inthefigureabove,pointBis: 2points.Answerdependsonversion. A) UnattainableforJoeandinefficientforJill. B) UnattainableforJillandinefficientforJoe. C) UnattainableforbothJoeandJill. D) InefficientforbothJoeandJill. 2) Inthefigureabove,JoeisoperatingatpointA.Joe’sopportunitycostofproducingashirtis A) 5/3pairofpants.2points B) 3/5pairofpants. C) 5pairsofpants. D) 2pairsofpants. 3) IfJoeandJillrealizethattheyeachpossessacomparativeadvantage,whichoutcomecanweexpect? A) Joewillspecializeinshirts,andJillwillspecializeinpants. B) Joewillspecializeinpants,andJillwillspecializeinshirts.2points C) BothJoeandJillwillspendhalftheirtimemakingshirtsandhalftheirtimemakingpants. D) BothanswersBandCaretrue. 4) IfJoeandJillmarry(ormerge)whatwilltheirPPFlooklike?Drawithere: Thegraphshouldconnectthefollowingthreepoints: 8pants,0shirts 5pants,5shirts 0pants,8shirts Points:3:1forcorrectintercepts,2forcorrectkink. ...
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