Comparative Advantage, Specialization and Exchange 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 ideas is attributed to David Ricardo?

Question 2 2. Two countries, Liberland and Finance Island, have decided to start trading. Liberland has a lower opportunity cost of producing fish, while Finance Island has a lower opportunity cost of producing potatoes. Based on the law of comparative advantages, what will be the likely result?

Question 3 3. A country has accepted that it needs to work based on the theory of comparative advantage. It has started trading with another country and completely stopped producing everything except one product. It now has a larger quantity of goods and services that can be produced, improved its productivity and uses resources more efficiently. Which of the following BEST explains the country's gains?

Question 4 4. Country X has a lower opportunity cost of producing computers than country Y, while country Y has a lower opportunity cost in producing wine. Based on the theory of comparative advantage, what should they produce?

Question 5 5. The opportunity cost to produce a computer in Japan is $100, the opportunity cost to produce it in China is $75, while the opportunity price to produce it in Slovakia is $57. Based on the theory of comparative advantage, where should the computers be produced?

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Question 6 6. The idea that something is economic on a microeconomic level, is similarly economic on a macroeconomic level, is attributed to _____.

Question 7 7. Which of the following quotes is attributed to Adam Smith?

Question 8 8. What is central to the theory of comparative advantages?

Question 9 9. Tom is an economics teacher at a university. He strongly believes that you should produce a good or service only if you can produce more than anyone else in the given amount of time. What idea does this BEST conforms to?

Question 10 10. 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?

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Question 11 11. Which of the following is NOT a benefit of specialization and exchange?

Question 12 12. When countries specialize in the goods in which they have a comparative advantage, which of the following is true?

Question 13 13. According to the two production possibility curves shown, Country A should specialize in the production of which of the following?

Question 14 14. 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 15 15. A person or nation that has a comparative advantage in the production of a good, should _____.

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Question 16 16.

Country A can either produce 10 cars or 10 computers, while country B can produce either 4 cars or 8 computers.

Based on this information, which of the following statements is FALSE?

Question 17 17. Which of the following are problems that all economies face?

Question 18 18. If Sally can produce 1 term paper or 4 cookies in one hour, and Adam can produce 2 term papers or 1 cookie in the same amount of time, which of these statements is true?

Question 19 19. According to the Law of Comparative Advantage, where should a good be produced?

Question 20 20. What happens if a nation doesn't have an absolute advantage in producing anything?

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Question 21 21. 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 22 22. Which of the following statements is true?

Question 23 23. 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?

Question 24 24. What does it mean for a nation to have an absolute advantage in the production of a good?

Comparative Advantage, Specialization and Exchange 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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