Micro Unit 1- Practice Questions #2

The video tutorial by Jacob Clifford covers Unit 1 practice questions focusing on economic concepts like absolute and comparative advantage. It explains how to calculate opportunity costs for Brazil and Peru, discusses terms of trade, and explores the input method for determining comparative advantage in tasks. The tutorial emphasizes understanding these concepts through examples and calculations.

What is the main focus of the video tutorial?

• Understanding economic growth

• Exploring absolute and comparative advantage

• Learning about supply and demand

• Studying market structures

Which country has an absolute advantage in producing wheat?

• Peru

• Brazil

• Neither has an advantage

• Both have the same advantage

What is the opportunity cost for Brazil to produce one ton of wheat?

• 2 tons of sugar

• 1.5 tons of sugar

• 1 ton of sugar

• 1/2 ton of sugar

Which country should specialize in sugar production based on comparative advantage?

• Brazil

• Peru

• Neither should specialize

• Both should specialize

What is the concept of 'terms of trade'?

• The total output of a country

• The ratio at which goods are exchanged between countries

• The cost of production

• The exchange rate between two currencies

What is the range of terms of trade that benefits both Brazil and Peru?

• Between 2.5 and 3

• Between 1.5 and 2

• Between 1 and 1.5

• Between 2 and 2.5

In the example of Hannah and Kevin, what type of question is being addressed?

• Output question

• Supply question

• Input question

• Demand question

Who has a comparative advantage in vacuuming?

• Hannah

• Kevin

• Neither has an advantage

• Both have the same advantage

What is the 'quick and dirty' method used for?

• Predicting market trends

• Calculating absolute advantage

• Estimating opportunity costs

• Determining comparative advantage without detailed calculations

According to the theory of comparative advantage, how should Hannah and Kevin divide their tasks?

• Hannah should wash dishes, Kevin should vacuum

• Kevin should wash dishes, Hannah should vacuum

• Hannah should do both tasks

• Kevin should do both tasks