Comparative & Absolute Advantage, Specialization & Trade Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following statements is true?

Question 2 2. A factory in the United States is deciding whether or not to use a new facility to produce cars, or clothing. The cars will cost more than the clothing to manufacture, but will sell for significantly more as well. Which item has the lowest opportunity cost?

Question 3 3. If Italy has a comparative advantage over France in the production of pasta, then _____.

Question 4 4. Assume that there are only two countries, Country A and Country B, producing only two goods, corn cereal and designer jeans. The table here shows the production possibilities for these two countries. Which of the following statements is correct?

Question 5 5. The table here shows the labor hours necessary to produce one unit of two goods, salmon and coconut creme pies, in two countries. If labor is the only input used, which of the following statements is true?

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Question 6 6. The United States can produce 20 strawberries or 80 apples, while Canada can produce 15 strawberries or 5 apples. Which of the following describes what will happen if these two countries trade with each other?

Question 7 7. What happens if a nation doesn't have an absolute advantage in producing anything?

Question 8 8. What is the difference between an absolute and comparative advantage?

Question 9 9. When countries specialize in the goods in which they have a comparative advantage, which of the following is true?

Question 10 10. Which of the following best explains why a country might specialize in the production of certain goods and/or services?

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Question 11 11. Country A's opportunity cost of producing 1 ton of corn is 5 tons of wheat, while Country B's opportunity cost of producing 1 ton of corn is 1/3 of a ton of wheat. Which of the following statements is true?

Question 12 12. What does it mean for a nation to have an absolute advantage in the production of a good?

Question 13 13. Which of the following is NOT a benefit of specialization and exchange?

Question 14 14. What determines if a country has an absolute advantage in the production of a good?

Question 15 15. According to the two production possibility curves shown, Country A should specialize in the production of which of the following?

Comparative & Absolute Advantage, Specialization & Trade Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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