Page 1
1.
As long as people have different _____, everyone has a comparative advantage in
something.
A)
direct costs
B)
benefits
C)
utility
D)
opportunity costs
2.
Because of trade, a country may:
A)
consume outside its production possibility frontier.
B)
consume inside its production possibility frontier.
C)
find its production possibility frontier shifting outward.
D)
avoid opportunity costs.
3.
An economy is said to have a comparative advantage if it:
A)
can produce more of all goods than another economy.
B)
can produce fewer of all goods than another economy.
C)
has the highest cost of producing a particular good, compared with other
economies.
D)
has the lowest cost of producing a particular good, compared with other economies.
4.
The economy with the lowest opportunity cost of producing a particular good is said to
have a(n):
A)
technological advantage.
B)
comparative advantage.
C)
production possibility frontier.
D)
increasing opportunity cost.
5.
An economy is said to have a comparative advantage in the production of a good if it
can produce that good:
A)
with more resources than another economy.
B)
with a higher opportunity cost than another economy.
C)
outside its production possibilities curve.
D)
at a lower opportunity cost than another economy.
Page 2
Use the following to answer question 6:
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6.
(Ref 3-1 Table: Fish and Coconut Production Possibilities) Use Table: Fish and Coconut
Production Possibilities. The table shows the maximum number of fish and coconuts
that Tom and Hank can produce if they produce only one good. In the absence of trade,
Tom produces and consumes 9 fish and 2 coconuts, and Hank produces and consumes 3
fish and 2 coconuts. Now they decide to engage in trade. Which statement is incorrect?
A)
For both to become better off, each should specialize in the production of some
good. However, since Hank is equally productive in both goods, it doesn’t matter
which good each specializes in.
B)
For both to become better off, each should specialize completely in the production
of the good in which he has a comparative advantage.
C)
After trade, it is possible for Tom to consume 9 fish and 2.5 coconuts and for Hank
to consume 3 fish and 2.5 coconuts.
D)
For each individual, the consumption point after trade will lie outside that
individual’s production possibility frontier.
7.
In one hour, the United States can produce 25 tons of steel or 250 automobiles. In one
hour, Japan can produce 30 tons of steel or 275 automobiles. This information implies
that:
A)
Japan has a comparative advantage in the production of automobiles.
B)
the United States has an absolute advantage in the production of steel.
C)
Japan has a comparative advantage in the production of both goods.
D)
the United States has a comparative advantage in the production of automobiles.
Use the following to answer questions 8-9:
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Page 3
8.
(Ref 3-2 Table: Coffee and Salmon Production Possibilities) Use Table: Coffee and
Salmon Production Possibilities. The table shows the maximum amounts of coffee and
salmon that Brazil and Alaska can produce if they just produce one good. The
opportunity cost of producing 1 unit of coffee for Brazil is _____ salmon.
A)
2
B)
0.25
C)
1
D)
0.5
9.
(Ref 3-2 Table: Coffee and Salmon Production Possibilities) Use Table: Coffee and
Salmon Production Possibilities. The table shows the maximum amounts of coffee and
salmon that Brazil and Alaska can produce if they just produce one good. The
opportunity cost of producing 1 unit of salmon for Alaska is _____ coffee(s).
A)
2
B)
0.25
C)
1
D)
0.5
10.
Free trade between countries:
A)
should be based on absolute advantage.
B)
always involves wealthy countries exploiting less developed nations.
C)
will shift the domestic production possibility frontier to the right.
D)
will allow for greater levels of consumption than without trade.
11.
If they spend all night writing computer programs, Laurence can write 10 programs, and
Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make
6 pairs, and Carrie Anne can make 4. Given this information and supposing Laurence
and Carrie Anne have constant opportunity costs, we know that _____ has an absolute
advantage in _____.
A)
Laurence; programs but not in sunglasses.
B)
Laurence; both programs and sunglasses.
C)
Carrie Anne; programs but not in sunglasses.
D)
Carrie Anne; both programs and sunglasses.
Page 4
12.
If they spend all night writing computer programs, Laurence can write 10 programs, and
Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make
6 pairs, and Carrie Anne can make 4. We know that:
A)
Laurence’s opportunity cost of writing programs is less than Carrie Anne’s.
B)
Laurence’s opportunity costs of writing programs and of making sunglasses are less
than Carrie Anne’s.
C)
Carrie Anne’s opportunity costs of writing programs and of making sunglasses are
less than Laurence’s.
D)
Carrie Anne’s opportunity cost of writing programs is less than Laurence’s.
13.
If they spend all night writing computer programs, Laurence can write 10 programs, and
Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make
6 pairs, and Carrie Anne can make 4. We know that _____ has a comparative advantage
in _____.
A)
Laurence; programs
B)
Laurence; both programs and sunglasses
C)
Carrie Anne; programs
D)
Carrie Anne; both programs and sunglasses
14.
Which statement is true?
A)
Some very talented people have a comparative advantage in everything they do.
B)
Some very untalented people have a comparative advantage in nothing they do.
C)
Some very talented people have a very low opportunity cost in everything they do.
D)
It is possible to have an absolute disadvantage but a comparative advantage in
something.
15.
In a single day, Sarah can produce 10 hamburgers, and Abe can produce 5 hamburgers.
Therefore, _____ has a(n) _____ advantage in making hamburgers.
A)
Sarah; comparative
B)
Sarah; absolute
C)
Abe; comparative
D)
Abe; absolute
16.
If they produce only hamburgers, in a single day Sarah can produce 10 hamburgers, and
Abe can produce 5 hamburgers. If they make milkshakes only, in a single day Sarah can
produce 10 milkshakes, and Abe can produce 4 milkshakes. Therefore, _____ has an
absolute advantage and a comparative advantage in making _____.
A)
Sarah; hamburgers.
B)
Sarah; milkshakes.
C)
Abe; hamburgers.
D)
Abe; milkshakes.
Page 5
17.
Roommates Sarah and Zoe are hosting a Halloween party and have to make food for
their guests and costumes for themselves. To finish both tasks as quickly as possible,
Sarah and Zoe know that each of them should focus on just one task, but they don’t
know who should do what. Sarah and Zoe should determine which roommate:
A)
has the absolute advantage in cooking.
B)
has the comparative advantage in cooking.
C)
can cook the most in a given amount of time.
D)
can complete the cooking in the least amount of time.
18.
Economists generally believe that a country should specialize in the production of a
good or service if the:
A)
production possibility frontier is further from the origin than that of any other
country.
B)
production possibility frontier is closer to the origin than that of any other country.
C)
country can produce the product using more resources than any other country.
D)
country can produce the product while forgoing fewer alternative products than any
other country.
Use the following to answer questions 19-21:
19.
(Ref 3-3 Table: Coffee and Salmon Production Possibilities II) Use Table: Coffee and
Salmon Production Possibilities II. This table shows the maximum amounts of coffee
and salmon, both measured in pounds, that Brazil and Alaska can produce if they just
produce one good. Brazil has an absolute advantage in producing:
A)
coffee only.
B)
salmon only.
C)
both coffee and salmon.
D)
neither coffee nor salmon.
Page 6
20.
(Ref 3-3 Table: Coffee and Salmon Production Possibilities II) Use Table: Coffee and
Salmon Production Possibilities II. This table shows the maximum amounts of coffee
and salmon, both measured in pounds, that Brazil and Alaska can produce if they just
produce one good. Alaska has an absolute advantage in producing:
A)
coffee only.
B)
salmon only.
C)
both coffee and salmon.
D)
neither coffee nor salmon.
21.
(Ref 3-3 Table: Coffee and Salmon Production Possibilities II) Use Table: Coffee and
Salmon Production Possibilities II. This table shows the maximum amounts of coffee
and salmon, both measured in pounds, that Brazil and Alaska can produce if they just
produce one good. Brazil has a comparative advantage in producing:
A)
coffee only.
B)
salmon only.
C)
both coffee and salmon.
D)
neither coffee nor salmon
22.
An economy is said to have a comparative advantage in the production of one good if it:
A)
can produce more of all goods than another economy.
B)
can produce fewer of all goods than another economy.
C)
has the highest opportunity cost of producing a particular good.
D)
has the lowest opportunity cost of producing a particular good.
23.
An economy that has the lowest opportunity cost of producing a particular good is said
to have a(n):
A)
absolute advantage in production of that good.
B)
comparative advantage in production of that good.
C)
production possibility frontier.
D)
increasing opportunity cost in production of that good.
24.
The concept of comparative advantage is based on:
A)
absolute labor productivity.
B)
relative labor costs.
C)
dollar prices of labor.
D)
relative opportunity costs.
Page 7
25.
An economy is said to have a comparative advantage in the production of a good if it
can produce that good:
A)
with more resources than another economy.
B)
at a higher opportunity cost than another economy.
C)
outside its production possibility frontier.
D)
at a lower opportunity cost than another economy.
26.
If the opportunity cost of manufacturing machinery is lower in the United States than in
Britain and the opportunity cost of manufacturing sweaters is higher in the United States
than in Britain, then the United States will:
A)
export both sweaters and machinery to Britain.
B)
import both sweaters and machinery from Britain.
C)
export sweaters to Britain and import machinery from Britain.
D)
import sweaters from Britain and export machinery to Britain.
27.
If the opportunity cost of manufacturing machinery is higher in the United States than in
Britain and the opportunity cost of manufacturing sweaters is lower in the United States
than in Britain, then the United States will:
A)
export both sweaters and machinery to Britain.
B)
import both sweaters and machinery from Britain.
C)
export sweaters to Britain and import machinery from Britain.
D)
import sweaters from Britain and export machinery to Britain.
28.
Trade can be beneficial to an economy because:
A)
it results in a more efficient use of the combined resources of some of the trading
countries, even though it reduces efficiency in others.
B)
more goods and services can be obtained at lower opportunity cost.
C)
it prevents specialization in activities in which countries have a comparative
advantage.
D)
it eliminates unemployment.
29.
If Brazil gives up three automobiles for each ton of coffee it produces, while Peru gives
up seven automobiles for each ton of coffee it produces, then Brazil has a comparative
advantage in _____ production and should specialize in _____.
A)
automobile; coffee
B)
coffee; automobiles
C)
coffee; coffee
D)
automobile; automobiles
Page 8
30.
If countries engage in international trade:
A)
they give up the ability to specialize in production.
B)
worldwide levels of production are lower.
C)
they can consume inside their production possibility frontiers.
D)
they can consume outside their production possibility frontiers.
Use the following to answer question 31:
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31.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I.
Sweden has an absolute advantage in producing:
A)
cell phones only.
B)
herring only.
C)
both cell phones and herring.
D)
neither cell phones nor herring.
32.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I.
Finland has an absolute advantage in producing:
A)
cell phones only.
B)
herring only.
C)
both cell phones and herring.
D)
neither cell phones nor herring.
Page 9
Use the following to answer questions 33-37:
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33.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I.
Sweden has a comparative advantage in producing:
A)
cell phones only.
B)
herring only.
C)
both cell phones and herring.
D)
neither cell phones nor herring.
34.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I.
Finland has a comparative advantage in producing:
A)
cell phones only.
B)
herring only.
C)
both cell phones and herring.
D)
neither cell phones nor herring.
35.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I. The
opportunity cost of producing 1 box of cell phones for Sweden is _____ box(es) of
herring.
A)
10
B)
0.2
C)
5
D)
0.1
36.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I. The
opportunity cost of producing 1 box of cell phones for Finland is _____ box(es) of
herring.
A)
10
B)
0.5
C)
5
D)
0.1
Page 10
37.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I. The
opportunity cost of producing 1 box of herring for Sweden is _____ box(es) of cell
phones.
A)
10
B)
0.5
C)
5
D)
0.1
38.
(Ref 3-4 Table: Comparative Advantage I) Use Table: Comparative Advantage I. The
opportunity cost of producing 1 box of herring for Finland is _____ box(es) of cell
phones.
A)
10
B)
0.2
C)
5
D)
0.1
Use the following to answer questions 39-46:
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Page 11
39.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage.
Eastland has an absolute advantage in producing:
A)
oranges only.
B)
peaches only.
C)
both oranges and peaches.
D)
neither oranges nor peaches.
40.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage.
Westland has an absolute advantage in producing:
A)
oranges only.
B)
peaches only.
C)
both oranges and peaches.
D)
neither oranges or peaches.
41.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage. The
opportunity cost of producing 1 box of oranges for Eastland is _____ box(es) of
peaches.
A)
1
B)
0.25
C)
4
D)
10
42.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage. The
opportunity cost of producing 1 box of oranges for Westland is _____ box(es) of
peaches.
A)
1
B)
0.25
C)
4
D)
10
43.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage. The
opportunity cost of producing 1 box of peaches for Eastland is _____ box(es) of
oranges.
A)
1
B)
0.25
C)
4
D)
10
Page 12
44.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage. The
opportunity cost of producing 1 box of peaches for Westland is _____ box(es) of
oranges.
A)
1
B)
0.25
C)
4
D)
10
45.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage.
Eastland has a comparative advantage in producing:
A)
oranges only.
B)
peaches only.
C)
both oranges and peaches.
D)
neither oranges nor peaches.
46.
(Ref 3-5 Figure: Comparative Advantage) Use Figure: Comparative Advantage.
Westland has a comparative advantage in producing:
A)
oranges only.
B)
peaches only.
C)
both oranges and peaches.
D)
neither oranges nor peaches.
47.
Which statement is true?
A)
Very talented people may have a comparative advantage in everything they do.
B)
Very untalented people have a comparative advantage in something they do.
C)
Very talented people may have a low opportunity cost in most things they do.
D)
Very untalented people may have a high opportunity cost in most things they do.
48.
In a single day, George can bake 10 cakes and Greta can bake 5 cakes. We know that
_____ has a(n) _____ advantage in baking cakes.
A)
George; comparative
B)
George; absolute
C)
Greta; comparative
D)
Greta; absolute
Page 13
49.
If they bake only cakes, in a single day George can bake 10 cakes, and Greta can bake 5
cakes. If they make only pies, in a single day George can bake 10 pies, while Greta can
bake 4 pies. We know that _____ has an absolute advantage and a comparative
advantage in making _____.
A)
George; cakes
B)
George; pies
C)
Greta; cakes
D)
Greta; pies
50.
Greta starts using a new baking technique, and she can now do twice as much of
everything. In a single day, Greta can now make 10 cakes or 8 pies, rather than the 5
cakes and 4 pies she could previously bake. Greta’s production possibility frontier has
_____, and her opportunity cost of making pies _____.
A)
shifted right; is unchanged
B)
shifted right; has decreased
C)
not changed; has increased
D)
not changed; has decreased
51.
Coworkers Yvonne and Rodney are washing dishes and sweeping the floors of the store.
They know that to finish both tasks as quickly as possible, each of them should focus on
just one task, but they don’t know who should do what. Yvonne and Rodney should
determine which one:
A)
has the absolute advantage in both sweeping and dishwashing.
B)
has the comparative advantage in dishwashing.
C)
has the production possibility frontier that is farthest from the origin in
dishwashing.
D)
can wash the dishes faster.
52.
To achieve gains from trade, each nation should specialize in the production of a good
or service if:
A)
its production possibility frontier is farther from the origin than that of any other
country.
B)
its production possibility frontier is closer to the origin than that of any other
country.
C)
the country can make that good or service using fewer resources than any other
country.
D)
the country can make that good or service while forgoing the production of fewer
alternative products than any other country.
Page 14
53.
Dr. Colgate is a dentist who employs an assistant, Ms. Crest. If Dr. Colgate worked all
day at the front desk, she could answer 40 phone calls. If she worked all day with
patients, she could clean the teeth of 40 patients. If Ms. Crest worked all day at the front
desk, she could answer 60 phone calls. If she worked all day with patients, she could
clean the teeth of 20 patients. _____ has a(n) _____ advantage in _____.
A)
Dr. Colgate; absolute; answering phones
B)
Ms. Crest; comparative; answering phones
C)
Ms. Crest; absolute; cleaning patients’ teeth
D)
Dr. Colgate; comparative; answering phones
Use the following to answer questions 54-55:
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54.
(Ref 3-6 Table: Wheat and Aluminum) Use Table: Wheat and Aluminum. The United
States and Germany can produce both wheat and aluminum. The table shows, in
tonnage, the maximum annual output combinations of wheat and aluminum that can be
produced. Which choice represents a possible trade based on specialization and
comparative advantage?
A)
Germany would trade 2 tons of wheat to the United States for 1 ton of aluminum.
B)
Germany would trade 2 tons of aluminum to the United States for 0.5 ton of wheat.
C)
The United States would trade 1 ton of wheat to Germany for 1 ton of aluminum.
D)
The United States would trade 1 ton of wheat to Germany for 1.5 tons of
aluminum.
Page 15
55.
(Ref 3-6 Table: Wheat and Aluminum) Use Table: Wheat and Aluminum. The United
States and Germany can produce both wheat and aluminum. The table shows the
maximum annual output combinations of wheat and aluminum that can be produced.
Based on the table:
A)
the United States has a comparative advantage in wheat and an absolute advantage
in wheat.
B)
Germany has an absolute advantage in aluminum and a comparative advantage in
wheat.
C)
the United States has a comparative advantage in both aluminum and wheat.
D)
Germany has a comparative advantage in aluminum and an absolute advantage in
aluminum.
56.
In one day, Kessy can bake 10 cookies or mix 15 glasses of lemonade. His friend Ava
can make 10 cookies or 10 glasses of lemonade. His other friend, Ian, can make 10
cookies or 20 glasses of lemonade. Who has the lowest opportunity cost in cookie
production?
A)
Kessy
B)
Ava
C)
Ian
D)
Kessy and Ava have the same opportunity cost in cookie production.
57.
Because Casey can type reports faster and more accurately than Ahmet, Casey has a(n)
_____ in typing reports.
A)
comparative advantage
B)
absolute advantage
C)
opportunity cost
D)
specialization
58.
Mark and Julie are going to sell brownies and cookies for their third annual fundraiser
bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15
brownies or 15 cookies. Based on this information, _____ has the comparative
advantage in making brownies and _____ has the comparative advantage in making
cookies.
A)
Mark; Julie
B)
Mark; Mark
C)
Julie; Mark
D)
Julie; Julie
Page 16
59.
Mark and Julie are going to sell brownies and cookies for their third annual fundraiser
bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15
brownies or 15 cookies. What is Mark’s opportunity cost to produce one brownie?
A)
1 cookie
B)
1 brownie
C)
0.5 cookie
D)
0.5 brownie
60.
Mark and Julie are going to sell brownies and cookies for their third annual fundraiser
bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15
brownies or 15 cookies. With specialization, _____ brownies and _____ cookies will be
made in one day.
A)
15; 20
B)
40; 20
C)
40; 15
D)
55; 35
61.
Mark and Julie are going to sell brownies and cookies for their third annual fundraiser
bake sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15
brownies or 15 cookies. Based on this information, _____ has the absolute advantage in
making brownies and _____ has the absolute advantage in making cookies.
A)
Mark; Julie
B)
Mark; Mark
C)
Julie; Mark
D)
Mark; neither Mark nor Julie
Use the following to answer questions 62-63:
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Page 17
62.
(Ref 3-7 Table: Bongos and Frisbees) Use Table: Bongos and Frisbees. Bill and Mickey
make bongos and Frisbees. Who has the comparative advantage in producing Frisbees?
A)
Bill
B)
Mickey
C)
both
D)
neither
63.
(Ref 3-7 Table: Bongos and Frisbees) Use Table: Bongos and Frisbees. Bill and Mickey
make bongos and Frisbees. Who should specialize in the production of bongos?
A)
Bill
B)
Mickey
C)
both
D)
neither
64.
If the opportunity cost of manufacturing automobiles is lower in the United States than
in Britain and the opportunity cost of manufacturing airplanes is higher in the United
States than in Britain, then the United States will:
A)
export both airplanes and automobiles to Britain.
B)
import both airplanes and automobiles from Britain.
C)
export airplanes to Britain and import automobiles from Britain.
D)
import airplanes from Britain and export automobiles to Britain.
65.
If the opportunity cost of manufacturing automobiles is higher in the United States than
in Britain and the opportunity cost of manufacturing airplanes is lower in the United
States than in Britain, then the United States will:
A)
export both airplanes and automobiles to Britain.
B)
import both airplanes and automobiles from Britain.
C)
export airplanes to Britain and import automobiles from Britain.
D)
import airplanes from Britain and export automobiles to Britain.
66.
Assume that Colombia gives up three motorcycles for each ton of coffee it produces,
while Bolivia gives up seven motorcycles for each ton of coffee it produces. Colombia
has a comparative advantage in _____ production and should specialize in _____.
A)
motorcycle; coffee
B)
coffee; motorcycles
C)
coffee; coffee
D)
motorcycle; motorcycles
Page 18
67.
Bangladesh produces much of the clothing we wear because it can produce more clothes
than can the United States.
A)
True
B)
False
68.
Nations can gain from trade with other nations, even if they are less productive in all
industries than the nations with which they trade.
A)
True
B)
False
Use the following to answer questions 69-70:
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69.
(Ref 3-8 Table: Fish and Coconut Production Possibilities) Use Table: Fish and Coconut
Production Possibilities. The table shows the maximum number of fish or coconuts that
Tom and Hank can produce when each produces only one of the goods. The table
implies that Hank has an absolute advantage in the production of both goods.
A)
True
B)
False
70.
(Ref 3-8 Table: Fish and Coconut Production Possibilities) Use Table: Fish and Coconut
Production Possibilities. The table shows the maximum number of fish or coconuts that
Tom and Hank can produce when each produces only one of the goods. The table
implies that Tom has a comparative advantage in the production of both goods.
A)
True
B)
False
71.
Absolute advantage is the basis for gains from trade.
A)
True
B)
False
Page 19
72.
The principle of comparative advantage suggests that, if New York and Florida
exchange taxi parts for oranges, each state will be made worse off.
A)
True
B)
False
73.
Consider a nation with a large economy, like the United States, and a nation with a
small economy, like the Dominican Republic. How can the United States, with absolute
advantage in production of almost all goods, benefit from trade with the Dominican
Republic?
74.
Table: Production of Good Z and Good X in Urbanville
Use Table: Production of Good Z and Good X in Urbanville. This table shows the
production possibility frontier for Urbanville. Suppose Urbanville is producing at
combination C and moves to combination D. What is the opportunity cost of this move?
A)
15 of X
B)
5 of Z
C)
15 of Z
D)
45 of X
Page 20
75.
Table: Production of Good Z and Good X in Urbanville
Use Table: Production of Good Z and Good X in Urbanville. This table shows the
production possibility frontier for Urbanville. Suppose Urbanville is producing at
combination F, what is the opportunity cost of a move to combination E?
A)
5 of Z
B)
20 of Z
C)
25 of X
D)
0 of X
76.
If an economy produces the desired mix of goods from its available resources, then this
mix of goods is:
A)
allocatively efficient.
B)
both productively and allocatively efficient.
C)
productively efficient.
D)
neither productively nor allocatively efficient.
Page 21
77.
Scenario: Countries A and B
Use Scenario: Countries A and B. Given this information, country _____ has a
comparative advantage in the production of wheat, and country _____ has a
comparative advantage in the production of steel.
A)
A; A
B)
A; B
C)
B; B
D)
B; A
78.
Scenario: Countries A and B
Use Scenario: Countries A and B. If each country devotes half of its resources to the
production of wheat and half to the production of steel, then their combined total
production of wheat will be _____ tons and their combined total production of steel will
be _____ tons.
A)
450; 325
B)
900; 650
C)
500; 250
D)
400; 400
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79.
Scenario: Countries A and B
Use Scenario: Countries A and B. If country B produces 300 tons of steel, how many
tons of wheat can it produce?
A)
100
B)
200
C)
300
D)
400
80.
Scenario: Countries A and B
Use Scenario: Countries A and B. If countries A and B both specialize and trade:
A)
only country A will gain.
B)
only country B will gain.
C)
country A and country B will gain if they both specialize in the good in which they
have a comparative advantage.
D)
neither country will gain.
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81.
Scenario: Countries A and B
Use Scenario: Countries A and B. Given this information, the country that has the
absolute advantage in wheat is _____, and the country that has the absolute advantage in
steel is _____.
A)
A; A
B)
A; B
C)
B; B
D)
B; A
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