ECO121-A03

QN=2 (2206)

(17758) Refer to Figure 3-3.  Enid has an absolute advantage in the production of

• burritos and a comparative advantage in the production of tacos.

• burritos and a comparative advantage in the production of burritos.

• neither good and a comparative advantage in the production of tacos.

• neither good and a comparative advantage in the production of burritos.

QN=3 (2226)

(17732) Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year.  There are 20 workers in Cornland and 20 workers in Oatland.  If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats.  If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by

• a.

  280 bushels of corn and 450 bushels of oats.

• b.

  340 bushels of corn and 500 bushels of oats.

• c.

  360 bushels of corn and 520 bushels of oats.

• d.

  360 bushels of corn and 640 bushels of oats.

QN=4 (2210)

(17726) Which famous economist developed the principle of comparative advantage as we know it today?

• a.

  Adam Smith

• b.

  David Ricardo

• c.

  John Maynard Keynes

• d.

  Milton Friedman

QN=5 (2227)

(17749) Refer to Table 3-4.  The opportunity cost of 1 pound of potatoes for the farmer is

• a.

  1/5 pound of meat.

• b.

  2 hours of labor.

• c.

  5 pounds of meat.

• d.

  5 hours of labor.

QN=6 (2254)

(17769) Refer to Table 23-5.  In 2008, Batterland’s real GDP was

• a.

  $100.

• b.

  $390.

• c.

  $400.

• d.

  $540.

QN=7 (2244)

(17751) Refer to Table 3-5.  England has a comparative advantage in the production of

• a.

  cheese and Spain has a comparative advantage in the production of bread.

• b.

  bread and Spain has a comparative advantage in the production of cheese.

• c.

  both goods and Spain has a comparative advantage in the production of neither good.

• d.

  neither good and Spain has a comparative advantage in the production of both goods.

QN=8 (2258)

(17789) What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

• a.

  capital

• b.

  consumption

• c.

  investment

• d.

  costs

QN=9 (2238)

(17761) Refer to Figure 3-7.  The opportunity cost of 1 bowl for Juba is

• a.

  1/4 cup.

• b.

  2/3 cup.

• c.

  3/2 cups.

• d.

  4 cups.

QN=10 (2251)

(17764) Gross domestic product is defined as

• a.

  (i) the quantity of all final goods and services demanded within a country in a given period of time.

• b.

  (ii) the quantity of all final goods and services supplied within a country in a given period of time.

• c.

  (iii) the market value of all final goods and services produced within a country in a given period of time.

• d.

  Both (i) and (ii) are correct.

QN=11 (2286)

(17800) In 1949, Sycamore, Illinois built a hospital for about $500,000.  In 1987, the county restored the courthouse for about $1.7 million.  A price index for nonresidential construction was 24 in 1949, 108 in 1987, and 126.5 in 2000.  According to these numbers, the hospital cost about

• a.

  $2.1 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.

• b.

  $2.1 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.

• c.

  $2.6 million in 2000 dollars, which is less than the cost of the courthouse restoration in 2000 dollars.

• d.

  $2.6 million in 2000 dollars, which is more than the cost of the courthouse restoration in 2000 dollars.