Unit 4 Quiz 2

Gains from trade arise because of:

• specialization in production.

• specialization in consumption.

• marginal analysis.

• individual choice.

• laissez-faire government policies.

Mark and Julie are going to sell brownies and cookies for their third annual bake sale fund- raiser. 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?

• 1 cookie

• 1 brownie

• 1/2 cookie

• 1/2 brownie

• 15 cookies

In a single growing season, the country of Pastoral can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, the country of Bucolic can raise 50 tons of beef or produce 750 boxes of tulips. At which of the prices below will trade occur between the two countries?

• One ton of beef costs 20 boxes of tulips.

• One ton of beef costs 5 boxes of tulips.

• One ton of beef costs 12 boxes of tulips.

• One ton of beef costs 8 boxes of tulips.

• One ton of beef costs 1 box of tulips.

Goods and services that are produced in a foreign country but consumed domestically are called _____ by the consuming nation.

• exports.

• imports.

• investment goods.

• consumer durables.

• consumer nondurables.

Two kids are responsible for chores around the house. It takes Eli 4 hours to clean his room and 1 hour to mow the lawn. It takes Max 5 hours to clean his room and 2 hours to mow the lawn.

• Eli has comparative advantage in cleaning his room and Max has comparative advantage in mowing the lawn.

• Max has comparative advantage in cleaning his room and Eli has comparative advantage in mowing the lawn.

• Neither kid has comparative advantage in cleaning his room or mowing the lawn.

• Eli has absolute advantage in cleaning his room and comparative advantage in cleaning his room.

• Max has absolute advantage in both cleaning his room and mowing the lawn.