Question :
21) If the opportunity cost of production for two goods : 1244904
21) If the opportunity cost of production for two goods is different between two countries, then
A) trade cannot benefit either country.
B) only one country can be made better off by trade.
C) mutually beneficial trade is possible.
D) trade will only benefit both countries if one can lower its opportunity costs.
22) If Canada has a comparative advantage relative to Mexico in the production of timber, then
A) the explicit cost of production for timber is lower in Canada than in Mexico.
B) the opportunity cost of production for timber is lower in Canada than in Mexico.
C) the implicit costs of production for timber are lower in Canada than in Mexico.
D) the average cost of production for timber is lower in Canada than in Mexico.
23) If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade?
A) Mexico has a lower opportunity cost of producing bacon than Mexico and Mexico has a comparative advantage in producing fishing poles.
B) The opportunity cost of producing fishing poles in Canada is higher than the opportunity cost of producing bacon in Mexico.
C) Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon.
D) Mexico has a higher opportunity cost of producing fishing poles than Canada, and Canada has a higher opportunity cost of producing bacon.
24) ________ is the ability to produce more of a good or service than competitors when using the same amount of resources.
A) Absolute advantage
B) Comparative advantage
C) Trade superiority
D) Trade autarky
25) Trade that is within a country or between countries is based on the principle of
A) absolute advantage.
B) scarcity.
C) competition.
D) comparative advantage.
Table 19-4
Berries
Fish
Rob
20
80
Bill
30
60
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and make their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced.
26) Refer to Table 19-4. Use the table above to select the statement that accurately interprets the data in the table.
A) Rob has an absolute advantage in picking berries and Bill has an absolute advantage in catching fish.
B) Bill has an absolute advantage in picking berries and Rob has an absolute advantage in catching fish.
C) Bill has an absolute advantage in picking berries and catching fish.
D) Rob has an absolute advantage in picking berries and catching fish.
27) Refer to Table 19-4. Use the table above to select the statement that accurately interprets the data in the table.
A) Bill has a greater opportunity cost than Rob for picking berries.
B) Bill’s opportunity cost for catching fish is less than Rob’s.
C) Rob has a greater opportunity cost than Bill for picking berries.
D) Bill’s opportunity cost for picking berries and catching fish are both greater than Rob’s.
28) Refer to Table 19-4. Use the table above to select the statement that accurately interprets the data in the table.
A) Bill has a comparative advantage in catching fish.
B) Rob has a comparative advantage in picking berries.
C) Rob has a comparative advantage in catching fish and picking berries.
D) Bill has a comparative advantage in picking berries.
29) Refer to Table 19-4. Use the table above to select the statement that accurately interprets the data in the table.
A) Rob has a comparative advantage in catching fish.
B) Bill has an absolute advantage in catching fish.
C) Bill has a comparative advantage in catching fish.
D) Rob has a comparative advantage in picking berries and catching fish.
Table 19-5
Empanadas
Tacos
Madison
30
50
Austin
24
32
Madison and Austin own Cafe Ole’. Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
30) Refer to Table 19-5. Select the statement that accurately interprets the data in the table.
A) Madison has an absolute advantage in making tacos and Austin has an absolute advantage in making empanadas.
B) Madison has an absolute advantage in making empanadas and Austin has an absolute advantage in making tacos.
C) Madison has an absolute advantage in making empanadas and tacos.
D) Austin has an absolute advantage in making empanadas and tacos.
