Arithmetic Quiz 2

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

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

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

20/500 and 30

200/50 and 300

2/5 and 750

1/5 and 150

5/2 and 750

750/300 and 300

200/50 and 300

2/5 and 750

1/5 and 150

5/2 and 750

100 and 6

200 and 7

150 and 4

600 and 4

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

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

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

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

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.

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.

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

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.

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

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.

Improve

Deteriorate

Not change

Need more information

Depends on the price of good

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.

32 and 360 envelops

40 and 4 envelopes

64 and 4 envelopes

160 and ¼ envelops

22 and 4 envelops

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