Econ Chapter 3

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Econ Mastery Quiz

Test your understanding of economic principles with our comprehensive quiz on Chapter 3! This quiz features multiple-choice questions designed to challenge your knowledge about trade, productivity, and comparative advantage.

Assess your grasp of core economic concepts
Apply your knowledge to real-world scenarios
Gain insights into comparative advantages in trade

15 Questions4 MinutesCreated by LearningEconomist247

1. People who provide you with goods and services

Are acting out of generosity.

Do so because they get something in return.

Have chosen not to become interdependent.

Are required to do so by the government.

2. When can two countries gain from trading two goods?

When the first country can only produce the first good and the second country can only produce the second good

When the first country can produce both goods, but can only produce the second good at great cost, and the second country can produce both goods, but can only produce the first good at great cost

When the first country is better at producing both goods and the second country is worse at producing both goods

Two countries could gain from trading two goods under all of the above conditions.

3. Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could

Benefit both Steve and Tom.

Benefit Steve, but not Tom.

Benefit Tom, but not Steve.

Benefit neither Steve nor Tom.

4. Abby bakes brownies and Liam grows flowers. In which of the following cases is it impossible for both Abby and Liam to benefit from trade?

Abby does not like flowers and Liam does not like brownies.

Abby is better than Liam at baking brownies and Liam is better than Abby at growing flowers.

Liam is better than Abby at baking brownies and at growing flowers.

Both Abby and Liam can benefit from trade in all of the above cases.

5. The production possibilities frontier illustrates

The combinations of output that an economy should produce.

The combinations of output that an economy should consume.

The combinations of output that an economy can produce.

All of the above are correct.

10. The opportunity cost of an item is

The number of hours that one must work in order to buy one unit of the item.

What you give up to get that item.

Always less than the dollar value of the item.

Always greater than the cost of producing the item.

11. Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

Kelly has a comparative advantage in repairing cars and David has a comparative advantage in cooking meals.

Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking meals.

Kelly has a comparative advantage in repairing cars and in cooking meals.

David has an absolute advantage in repairing cars and in cooking meals.

12. Comparative advantage is related most closely to which of the following?

Output per hour

Opportunity cost

Efficiency

Bargaining strength in international trade

13. When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy

Falls.

Stays the same.

Rises.

May fall, rise, or stay the same.

14. The gains from trade are

Evident in economic models, but seldom observed in the real world.

Evident in the real world, but impossible to capture in economic models.

A result of more efficient resource allocation than would be observed in the absence of trade.

Based on the principle of absolute advantage.

18. Adam Smith asserted that a person should never attempt to make at home

What it will cost him more to make than to buy.

Any good in which that person does not have an absolute advantage.

Any luxury good.

Any necessity.

19. Productivity is defined as the quantity of

Labor required to produce a nation’s GDP.

Labor required to produce one unit of goods and services.

Goods and services produced from each unit of labor input.

Goods and services produced per unit of time.

20. Phoenix furniture uses 12 workers, each working eight hours, to produce 192 rocking chairs. What is Phoenix’s productivity?

192 rocking chairs

24 rocking chairs per hour

2 rocking chairs per hour

2 hours per rocking chair

21. Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is Hit-It’s productivity?

320 baseball bats

160 baseball bats per hour

20 baseball bats per hour

None of the above is correct.

22. Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours. Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?

Jack

Rudy

Sam

Walter

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