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Chapter 3 practice quiz



Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

1. 

Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. In this case, trade could
a.
benefit both Jayson and Regan.
b.
benefit Jayson, but not Regan.
c.
benefit Regan, but not Jayson.
d.
not benefit Jayson nor Regan.
 

2. 

A country's consumption possibilities frontier can be outside its production possibilities frontier if
a.
additional resources become available.
b.
there is an increase in the level of technology.
c.
the country engages in trade.
d.
All of the above are correct.
e.
Both a and b are correct.
 
 
Table 3-1
 
Labor Hours Needed to Make 1 Pound of:

Pounds produced in 40 hours:
 
Meat
Potatoes
Meat
Potatoes
Farmer
8
2
5
20
Rancher
4
5
10
8
 

3. 

Refer to Table 3-1. The opportunity cost of 1 pound of meat for the farmer is
a.
1/4 hour of labor.
b.
4 hours of labor.
c.
4 pounds of potatoes.
d.
1/4 pound of potatoes.
 

4. 

Refer to Table 3-1. The opportunity cost of 1 pound of meat for the rancher is
a.
4 hours of labor.
b.
5 hours of labor.
c.
5/4 pounds of potatoes.
d.
4/5 pound of potatoes.
 

5. 

Refer to Table 3-1. The opportunity cost of 1 pound of potatoes for the farmer is
a.
8 hours of labor.
b.
2 hours of labor.
c.
4 pounds of meat.
d.
1/4 pound of meat.
 

6. 

Refer to Table 3-1. The opportunity cost of 1 pound of potatoes for the rancher is
a.
4 hours of labor.
b.
5 hours of labor.
c.
5/4 pounds of meat.
d.
4/5 pound of meat.
 

7. 

Refer to Table 3-1. The Farmer has an absolute advantage in
a.
meat, and the Rancher has an absolute advantage in potatoes.
b.
potatoes, and the Rancher has an absolute advantage in meat.
c.
meat, and the Rancher has an absolute advantage in meat.
d.
neither good, and the Rancher has an absolute advantage in both goods.
 

8. 

Refer to Table 3-1. The Rancher has an absolute advantage in
a.
both goods, and the Farmer has a comparative advantage in meat.
b.
meat, and the Farmer has a comparative advantage in potatoes.
c.
meat, and the Farmer has a comparative advantage in neither good.
d.
both goods, and the Farmer has a comparative advantage in potatoes.
 

9. 

Suppose a gardener produces both green beans and corn in her garden. If she must give up 13 bushels of corn to get 5 bushels of green beans, then the opportunity cost of 1 bushel of green beans is
a.
0.38 bushel of corn.
b.
2.6 bushels of corn.
c.
8 bushels of corn.
d.
18 bushels of corn.
 

10. 

Comparative advantage reflects
a.
productivity.
b.
relative opportunity cost.
c.
efficiency.
d.
terms of trade advantage.
 



 
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