Georgia Milestones: Comparative vs. Absolute Advantage 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. 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 2 2. Which of the following is NOT a benefit of specialization and exchange?

Question 3 3. 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 4 4. When countries specialize in the goods in which they have a comparative advantage, which of the following is true?

Question 5 5. Which of the following statements is false?

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Question 6 6. 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 7 7. One of the key principles of economics is the ____.

Question 8 8. Economic analysis occurs only because of a set of _____.

Question 9 9. At ____, both producers and consumers have something the other wants, and each is motivated to engage in an exchange.

Question 10 10. Which of the following statements is true?

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Question 11 11. A ____ between a consumer and a producer makes both parties better off than they were before the exchange.

Question 12 12. 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 13 13. Adam Smith's concept of the ____ is that as producers and consumers interact under the principle of voluntary exchange not only is each individual better off, but so is society as a whole.

Question 14 14. _____ helps decision-makers make predictions to find successful answers to production and consumption questions.

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

Question 17 17. What is the difference between an absolute and comparative advantage?

Question 18 18. What does it mean for a nation to have an absolute advantage in the production of a good?

Question 19 19. 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 20 20. 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?

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Question 21 21. What theory is the basis for when producers and consumers interact under the principle of voluntary exchange where not only is each individual better off, but so is society as a whole?

Question 22 22. What happens if a nation doesn't have an absolute advantage in producing anything?

Question 23 23. According to the two production possibility curves shown, Country A should specialize in the production of which of the following?

Question 24 24. Which of the following are problems that all economies face?

Question 25 25. If Italy has a comparative advantage over France in the production of pasta, then _____.

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Question 26 26. Which of the following statements are false?

Question 27 27. What determines if a country has an absolute advantage in the production of a good?

Question 28 28.

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

Question 30 30. Engaging in voluntary exchanges that make both parties better off than they were before the exchange is called _____.

Georgia Milestones: Comparative vs. Absolute Advantage 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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