Arithmetic Quiz 2

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  • 1/20 Questions

    Suppose that there are two countries (Home and Foreign) that produce two goods. Home's wages are 100% greater than Foreign's wages. Will trade be possible between Home and Foreign?

    • No, because Foreign's wages are lower than Home's wages.
    • Yes, Foreign will be able to export both products to Home.
    • Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in the same product.
    • No, because prices will be the same in each country.
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About This Quiz

Econ.

Arithmetic Quizzes & Trivia

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  • 2. 

    According to the Ricardian principle of comparative advantage, international trade increases a nation's total output because:

    • The nation's resources are used where they are most productive.

    • The output of the nation's trading partner declines.

    • The nation can produce to the exterior of its production possibilities frontier.

    • The nation is able to increase its consumption

    Correct Answer
    A. The nation's resources are used where they are most productive.
  • 3. 

    Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats. If the economy has 100 workers, then the economy can produce:

    • A maximum of 500 tennis rackets.

    • A maximum of 350 baseball bats.

    • 500 tennis rackets and 400 baseball bats.

    • Either 100 tennis rackets or 100 baseball bats only.

    • None of the above

    Correct Answer
    A. A maximum of 500 tennis rackets.
  • 4. 

    Our home equilibrium reflects the concepts of competitive markets in the following way(s):

    • The opportunity cost of each good is the inverse of the ratio of labor productivity.

    • Prices of each good reflect opportunity cost.

    • The opportunity cost of each good is the inverse of the ratio of labor productivity, prices of each good reflect opportunity cost, and wages are equal and reflect the value of the marginal product (MPL * P) for each good.

    • Wages are equal and reflect the value of the marginal product (MPL  P) for each good.

    • A & B

    Correct Answer
    A. The opportunity cost of each good is the inverse of the ratio of labor productivity, prices of each good reflect opportunity cost, and wages are equal and reflect the value of the marginal product (MPL * P) for each good.
  • 5. 

    (Table: Output in the U.S. and China) Using the data in the table, what will happen to the U.S. labor force after trade occurs with China? يوجد جدول

    • U.S. labor will move from apparel to agriculture, where its marginal productivity is higher.

    • U.S. jobs in apparel will be exported to China, and wheat exports will create additional jobs created in agriculture.

    • The value of output produced by U.S. labor will increase.

    • U.S. labor will move from apparel to agriculture, where its marginal productivity is higher. U.S. jobs in apparel will be exported to China, and wheat exports will create additional jobs created in agriculture, and the value of output produced by U.S. labor will increase.

    Correct Answer
    A. U.S. labor will move from apparel to agriculture, where its marginal productivity is higher. U.S. jobs in apparel will be exported to China, and wheat exports will create additional jobs created in agriculture, and the value of output produced by U.S. labor will increase.
  • 6. 

    If the maximum number of cloth produced is 300 and the maximum number of cloth produced is 600, then with a MPLcloth = 2, what is the number of workers in the economy and what is the MPLcloth?

    • 100 and 6

    • 200 and 7

    • 150 and 4

    • 600 and 4

    Correct Answer
    A. 150 and 4
  • 7. 

    If this economy produces no cloth, i) how many units of wheat are possible?___ ii) What is the opportunity cost of cloth in terms of wheat ___; iii) which is most desirable point for consumers; iv) which is least desirable for consumers __; and v) Equilibrium in the absence of international trade ) في رسمة

    • 50 , ii) 1 unit of cloth “costs” 2 units of wheat, iii) A; iv) A; and v) A

    • 200, ii) 1 unit of cloth “costs” 1/2 unit of wheat, iii) B; iv) B; and v) C

    • 400, ii) 1 unit of cloth “costs” 2 units of wheat, iii) C; iv) A; and v) D

    • 300, ii) 1 unit of cloth may be obtained by foregoing 1 unit of wheat, iii) B; iv) C; and v) C

    • 400, ii) 1 unit of cloth “costs” 2 units of wheat, iii) C; iv) D; and v) A

    Correct Answer
    A. 400, ii) 1 unit of cloth “costs” 2 units of wheat, iii) C; iv) D; and v) A
  • 8. 

    If the opportunity cost is constant (the PPF is a straight line), then a country will:

    • Partially specialize in the production of the exportable product.

    • Completely specialize in the production of the exportable product.

    • Not benefit from importing goods from another country.

    • Benefit by raising trade barriers.

    • It depends on the relative prices

    Correct Answer
    A. Completely specialize in the production of the exportable product.
  • 9. 

    Trade between two nations is not possible if they have:

    • Identical community indifference curves but different production possibilities frontiers.

    • Identical production possibilities frontiers but different community indifference curves.

    • Different production possibilities frontiers and different community indifference curves.

    • Identical production possibilities frontiers and identical community indifference curves.

    Correct Answer
    A. Identical production possibilities frontiers and identical community indifference curves.
  • 10. 

    17. Suppose that the table provided gives values of price indices for Ghana's exports and imports in 2006 and in 2007. Did Ghana's terms of trade improve, deteriorate, or not change between 2006 and 2007? جدول

    • Improve

    • Deteriorate

    • Not change

    • Need more information

    • Depends on the price of good

    Correct Answer
    A. Improve
  • 11. 

    Assume the MPLc = 2 cars is on the x-axis and the MPLb = 5 boats is on the y-axis. There are 150 workers in this hypothetical economy; the slope of the PPF for this economy with respect to a boat is __ and the maximum number of boats that can be produced ___:

    • 20/500 and 30

    • 200/50 and 300

    • 2/5 and 750

    • 1/5 and 150

    • 5/2 and 750

    Correct Answer
    A. 2/5 and 750
  • 12. 

    Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following is correct?

    • Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit.

    • Homer has a comparative advantage in picking fruit and Teddy has a comparative advantage in catching fish.

    • Homer has a comparative advantage in both catching fish and picking fruit.

    • Teddy has a comparative advantage in both catching fish and picking fruit.

    Correct Answer
    A. Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit.
  • 13. 

    The figure gives Home's international trading pattern. Point P is production with trade, and point C is consumption with trade. i) Which product does Home export__ ii) which product does home import __?, and ii) What is the international price of chemicals___? رسمه

    • I) Clothing ii) Chemicals iii) 2 unit of clothing per unit of clothing

    • I) Chemicals ii) Clothing iii) 2 unit of clothing per unit of chemical

    • I) Clothing ii) Clothing iii) 1 units of clothing per unit of chemicals

    • I) Chemicals ii) Chemical iii) 1/2 units of clothing per unit of chemicals

    • I) Chemicals ii) Clothing iii) 2 unit of clothing per 2 unit of chemical

    Correct Answer
    A. I) Chemicals ii) Clothing iii) 2 unit of clothing per unit of chemical
  • 14. 

    Assumptions for the problem: Suppose that a farmer spends 1000 hours/year growing wheat, we multiply the MPLW/hour*1000 hours = 27.5bu*1000=27,500 bushels in the US and 0.1*1000=100 bu. In the table above the productivity of workers in the textile, apparel and wheat sectors are given for the United States and China. i) The average worker in the United States produces _____ more apparel sales than China; ii) in the United States to produce an additional $1000 worth of apparel sales, ____ bushels of wheat must be forgone; and in China to produce an additional $1000 worth of apparel sales, ____ bushels of wheat must be forgone. يوجد جدول

    • I) 0.88; ii) 0.23; and iii) 7.0

    • I) 8.80, ii) 0.23; and iii) 0.07

    • I) 80.0, ii) 0.10; and iii) 0.70

    • I) 8.80, ii) 0.23; and iii) 0.007

    • I) 10.9, ii) 6.90; and iii) 70.0

    Correct Answer
    A. I) 8.80, ii) 0.23; and iii) 0.007
  • 15. 

    Chile and Argentina each produce jellybeans and peanut butter using labor as their only resource. Each country has 1,000 hours of labor. In Chile, 1 hour produces 1 pound of jellybeans and 2 hours produce 1 pound of peanut butter. In Argentina, 1 hour produces 1 pound of jellybeans and 3 hours produces 1 pound of peanut butter. When they do not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. i) In order for Chile to gain from trade, the price of jellybeans must be less than__; ii) Argentina's gains from trade will be largest when the price of jellybeans is__: iii) What is the opportunity cost of a pound of peanut butter in Chile___?; and iv) How many pounds of peanut butter and jellybeans do the two countries jointly produce when the specialize and trade with each other___?:

    • I) 0.50 pounds of peanut butter per pound of jellybeans ii) 0.50 pounds of peanut butter per pound of jellybeans; iii) 2 pounds of jellybeans per pound of peanut butter; and iv) 500 pounds of jellybeans and 1000 pounds of peanut butter

    • I) 2 pounds of peanut butter per pound of jellybeans; ii) 2 pounds of peanut butter per pound of jellybeans; iii) 2 pounds of jellybeans per pound of peanut butter; and iv) 1,000 pounds of jellybeans and 500 pounds of peanut butter .

    • I) 3 pounds of peanut butter per pound of jellybeans ii) 0.50 pounds of peanut butter per pound of jellybeans; iii) 0.33 pounds of jellybeans per pound of peanut butter; and iv) 333.33 pounds of jellybeans and 500 pounds of peanut butter

    • I) 0.33 pounds of peanut butter per pound of jellybeans ii) 0.33 pounds of peanut butter per pound of jellybeans; iii) 0.50 pounds of jellybeans per pound of peanut butter; and iv) 500 pounds of jellybeans and 1,000 pounds of peanut butter

    • I) 0.50 pounds of peanut butter per pound of jellybeans ii) 0.50 pounds of peanut butter per pound of jellybeans; iii) 2 pounds of jellybeans per pound of peanut butter; and iv) 1,000 pounds of jellybeans and 500 pounds of peanut butter

    Correct Answer
    A. I) 0.50 pounds of peanut butter per pound of jellybeans ii) 0.50 pounds of peanut butter per pound of jellybeans; iii) 2 pounds of jellybeans per pound of peanut butter; and iv) 1,000 pounds of jellybeans and 500 pounds of peanut butter
  • 16. 

    In the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. In the United Kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. i) International trade will occur between the United States and the United Kingdom so long as 1 ton of steel trades for__, ii The United Kingdom will gain the most from trade if__, and iii) Which statement below is correct?__,

    • I) at least 1 ton of chemicals, but no more than 2 tons of chemicals, ii) 1 ton of steel trades for 2 tons of chemicals, and iii)

    • I) at least 2 ton of chemicals, but no more than 3 tons of chemicals, ii) 1 ton of steel trades for 0.5 ton of chemicals, and iii) Wages in the United States and the United Kingdom will be unequal.

    • I) at least 0.33 ton of chemicals, but no more than 0.5 ton of chemicals, ii) 1 ton of steel trades for 0.5 ton of chemicals; and iii) U.K. wages will be higher than U.S. wages.

    • I) at least 0.55 ton of chemicals but no more than 0.75 ton of chemicals, ii) 1 ton of steel trades for 0.33 ton of chemicals; and iii) U.S. wages will be higher than U.K. wages.

    • I) at least 2 ton of chemicals, but no more than 3 tons of chemicals, ii) 1 ton of steel trades for 0.5 ton of chemicals, and iii) Wages in the United States and the United Kingdom will be equal

    Correct Answer
    A. I) at least 2 ton of chemicals, but no more than 3 tons of chemicals, ii) 1 ton of steel trades for 0.5 ton of chemicals, and iii) Wages in the United States and the United Kingdom will be unequal.
  • 17. 

    If a home country is exporting corn and importing bikes and if the relative price Pc/Pb is increasing, then:

    • The home country will export less corn.

    • The home country will export more corn.

    • The home country will import the same number of bikes.

    • There is no change in the trade pattern for the home country.

    Correct Answer
    A. The home country will export less corn.
  • 18. 

    Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. If Deb spends all her time assembling packets, how many can she assemble ___and what is her opportunity cost for assembling 1 packet____? رسم بياني

    • 32 and 360 envelops

    • 40 and 4 envelopes

    • 64 and 4 envelopes

    • 160 and ¼ envelops

    • 22 and 4 envelops

    Correct Answer
    A. 40 and 4 envelopes
  • 19. 

    Assume the MPLc = 2 cars is on the x-axis and the MPLb = 5 boats is on the y-axis. There are 150 workers in this hypothetical economy; the slope of the PPF for this economy with respect to cars is __ and the maximum number of cars that can be produced ___:

    • 750/300 and 300

    • 200/50 and 300

    • 2/5 and 750

    • 1/5 and 150

    • 5/2 and 750

    Correct Answer
    A. 750/300 and 300
  • 20. 

    Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. i) the table above gives their production possibilities and ii) With specialization and trade, Sweet Pansy produces ________ and Blue Violet produces ________.. يوجد جدول

    • I) Blue Violet has a comparative advantage in teapots and ii) 150 coffeepots, 150 teapots

    • I) Blue Violet has an absolute advantage in teapots and ii) 75 coffeepots, 150 teapots

    • I) Sweet Pansy has a comparative advantage in teapots and ii) 150 coffeepots, 75 teapots

    • I) Both have a comparative advantage in teapots and ii) 150 coffeepots, 150 teapots

    • I) Sweet Pansy has an absolute advantage in teapots and ii) 100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots

    Correct Answer
    A. I) Blue Violet has a comparative advantage in teapots and ii) 150 coffeepots, 150 teapots

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  • Mar 20, 2022
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