Question 1

Only a very small portion of people who use microwaves know how they work. This is an example of:

Accepted Answer

A)   a production possibility frontier.
B)   division of knowledge.
C)   absolute advantage.
D)   opportunity cost.

Question 2

Which of the following is typically a result of the division of knowledge?

Accepted Answer

A)   The society runs with the knowledge of a few persons.
B)   Each person has the same knowledge as everyone else.
C)   Labor productivity is higher..
D)   No one specializes in any activity.

Question 3

Trading increases the amount a single country can produce.

Accepted Answer

A) True 
 B)False

Question 4

Poor countries are at a distinct disadvantage when it comes to economic production; they get outcompeted in everything since they do not have a comparative advantage in anything.

Accepted Answer

A) True 
 B)False

Question 5

As trade becomes more extensive, it slows down the creation of new ideas because fewer people can specialize in areas like science and engineering.

Accepted Answer

A) True 
 B)False

Question 6

Globalization is best described as:

Accepted Answer

A)   a new process.
B)   an old process that has consistently grown.
C)   an old process that has grown intermittently.
D)   an old process that has declined over time.

Question 7

A production possibilities frontier shows:

Accepted Answer

A)   the supply and demand for a good in a country.
B)   all combinations of goods that a country can produce given its productivity and supply of inputs.
C)   the uninhabited territory of a country that is full of new possibilities.
D)   the goods that a country will be able to produce in the future if it continues to grow.

Question 8

Trade refers to the exchange of goods and services between at least two different nations.

Accepted Answer

A) True 
 B)False

Question 9

Traders should specialize in the good: that:

Accepted Answer

A)   that they can produce with the lowest opportunity cost.
B)   in which they have an absolute advantage.
C)   in which their trading partner has a comparative advantage.
D)   in which they do not have an absolute advantage.

Question 10

Use the following to answer questions:
Figure: PPF Goods X & Y 
-(Figure: PPF Goods X & Y)  Refer to the figure. Point A represents an allocation of resources that is:

Accepted Answer

A)   efficient.
B)   inefficient.
C)   impossible.
D)   the result of trade.

Question 11

Specialization is an example of self-interest aligning with the social interest because it increases the amount you can consume as well as the amount society can consume.

Accepted Answer

A) True 
 B)False

Question 12

The recent pace of globalization has been increased through:

Accepted Answer

A)   declining transportation costs.
B)   increased speed of communication.
C)   the integration of world markets.
D)   each of these developments.

Question 13

Use the following to answer questions:
Figure: PPF Mexico & United States 
-(Figure: PPF Mexico & United States)  Use the above figure in which both Mexico and the United States each have 24 units of labor. Mexico has a comparative advantage in ______ and the United States has a comparative advantage in ______.

Accepted Answer

A)   computers; shirts
B)   shirts; computers
C)   computers; computers
D)   shirts; shirts

Question 14

Use the following to answer questions:
Figure: Rice and Shirts 
-(Figure: Rice and Shirts)  Use the PPFs shown for the United States and India. If the United States and India specialize and trade, one country will trade away 20 pounds of rice in exchange for 20 shirts from the other. Compared with no trade, ______ will be able to consume ______ additional shirts, and _____ will be able to consume an additional ______ pounds of rice.

Accepted Answer

A)   the United States; 0; India; 8.6
B)   India; 5; the United States; 0
C)   the United States; 4; India; 8.6
D)   India; 8.6; the United States; 4

Question 15

Figure: Benin  In the figure, Benin has 32 workers, and the price per ton of cotton and ton of rice is $2,500 and $1,200, respectively. The average wage with no trade is ______, and the average wage with trade is ________.

Accepted Answer

A)   $850; $1,081.25
B)   $768.75; $1,000
C)   $1,000; $850
D)   $1,000; $1,081.25

Question 16

The better a person is at producing one good:

Accepted Answer

A)   the worse he is at producing other goods.
B)   the higher the opportunity cost to him of producing other goods.
C)   the lower the incentive he has to trade with other people.
D)   the better he is at producing other goods.

Question 17

In a world with trade, no one can afford to specialize.

Accepted Answer

A) True 
 B)False

Question 18

Use the following to answer questions:
Figure: Computers and Books 
-(Figure: Computers and Books)  According to the figure, both countries can increase consumption if:

Accepted Answer

A)   both countries buy computers and books from each other.
B)   both countries produce both computers and books.
C)   country A produces only computers and buys books from country B.
D)   country A produces only books and buys computers from country B.

Question 19

In a certain country it takes five of its 10 workers to produce one barrel of wine but only one worker to produce one yard of cloth. If we graphed this country's PPF (placing wine on the vertical axis and cloth on the horizontal axis), the slope of the PPF would equal -1/5.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following situations would lead to more starvation?

Accepted Answer

A)   a world where everyone grows his or her own food and there is no trade
B)   a world with trade and lots of specialization
C)   a world with immense division of knowledge
D)   a world where only some people specialize in food and everyone else produces something else

Exam 2: The Power of Trade and Comparative

Globalization is best described as:

Correct Answer
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Trading increases the amount a single country can produce.

Correct Answer
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The better a person is at producing one good:

Correct Answer
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Traders should specialize in the good: that:

Correct Answer
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Correct Answer
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Only a very small portion of people who use microwaves know how they work. This is an example of:

Correct Answer
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Poor countries are at a distinct disadvantage when it comes to economic production; they get outcompeted in everything since they do not have a comparative advantage in anything.

Correct Answer
verified

Which of the following situations would lead to more starvation?

Correct Answer
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A production possibilities frontier shows:

Correct Answer
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In a world with trade, no one can afford to specialize.

Correct Answer
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Which of the following is typically a result of the division of knowledge?

Correct Answer
verified

Trade refers to the exchange of goods and services between at least two different nations.

Correct Answer
verified

As trade becomes more extensive, it slows down the creation of new ideas because fewer people can specialize in areas like science and engineering.

Correct Answer
verified

Specialization is an example of self-interest aligning with the social interest because it increases the amount you can consume as well as the amount society can consume.

Correct Answer
verified

Figure: Benin In the figure, Benin has 32 workers, and the price per ton of cotton and ton of rice is $2,500 and $1,200, respectively. The average wage with no trade is , and the average wage with trade is __.

Correct Answer
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Use the following to answer questions: Figure: Computers and Books -(Figure: Computers and Books) According to the figure, both countries can increase consumption if:

Correct Answer
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Use the following to answer questions: Figure: PPF Goods X & Y -(Figure: PPF Goods X & Y) Refer to the figure. Point A represents an allocation of resources that is:

Correct Answer
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Use the following to answer questions: Figure: PPF Mexico & United States -(Figure: PPF Mexico & United States) Use the above figure in which both Mexico and the United States each have 24 units of labor. Mexico has a comparative advantage in and the United States has a comparative advantage in .

Correct Answer
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The recent pace of globalization has been increased through:

Correct Answer
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In a certain country it takes five of its 10 workers to produce one barrel of wine but only one worker to produce one yard of cloth. If we graphed this country's PPF (placing wine on the vertical axis and cloth on the horizontal axis), the slope of the PPF would equal -1/5.

Correct Answer
verified

Exam 2: The Power of Trade and Comparative

Globalization is best described as:

Correct AnswerverifiedShow Answer

Trading increases the amount a single country can produce.

Correct AnswerverifiedShow Answer

The better a person is at producing one good:

Correct AnswerverifiedShow Answer

Traders should specialize in the good: that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Only a very small portion of people who use microwaves know how they work. This is an example of:

Correct AnswerverifiedShow Answer

Poor countries are at a distinct disadvantage when it comes to economic production; they get outcompeted in everything since they do not have a comparative advantage in anything.

Correct AnswerverifiedShow Answer

Which of the following situations would lead to more starvation?

Correct AnswerverifiedShow Answer

A production possibilities frontier shows:

Correct AnswerverifiedShow Answer

In a world with trade, no one can afford to specialize.

Correct AnswerverifiedShow Answer

Which of the following is typically a result of the division of knowledge?

Correct AnswerverifiedShow Answer

Trade refers to the exchange of goods and services between at least two different nations.

Correct AnswerverifiedShow Answer

As trade becomes more extensive, it slows down the creation of new ideas because fewer people can specialize in areas like science and engineering.

Correct AnswerverifiedShow Answer

Specialization is an example of self-interest aligning with the social interest because it increases the amount you can consume as well as the amount society can consume.

Correct AnswerverifiedShow Answer

Figure: Benin In the figure, Benin has 32 workers, and the price per ton of cotton and ton of rice is $2,500 and $1,200, respectively. The average wage with no trade is ______, and the average wage with trade is ________.

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Computers and Books -(Figure: Computers and Books) According to the figure, both countries can increase consumption if:

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: PPF Goods X & Y -(Figure: PPF Goods X & Y) Refer to the figure. Point A represents an allocation of resources that is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The recent pace of globalization has been increased through:

Correct AnswerverifiedShow Answer

In a certain country it takes five of its 10 workers to produce one barrel of wine but only one worker to produce one yard of cloth. If we graphed this country's PPF (placing wine on the vertical axis and cloth on the horizontal axis), the slope of the PPF would equal -1/5.

Correct AnswerverifiedShow Answer

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Figure: Benin In the figure, Benin has 32 workers, and the price per ton of cotton and ton of rice is $2,500 and $1,200, respectively. The average wage with no trade is , and the average wage with trade is __.

Correct Answer
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