Econ 111 - Test 1 questions with
complete correct solutions
How will a recession affect a country's PPF? - correct answer ✔✔The country will produce at a
point below an unchanged PPF.
How can a point be achieved outside of the PPF? - correct answer ✔✔This point can never be
achieved.
France can produce 100 violins or 250 electric shavers. Germany can produce 200 violins or 200
electric shavers. Which country has an absolute advantage in electric shaver production? -
correct answer ✔✔Germany
France can produce 100 violins or 250 electric shavers. Germany can produce 200 violins or 300
electric shavers. Which country has the comparative advantage in electric shaver production? -
correct answer ✔✔France
If an economy has a very high but declining unemployment rate and a growth rate that is small
but positive, which phase of the business cycle does this best describe? - correct answer
✔✔Recovery
North Face is a popular U.S. brand. However, most of its apparel is produced in China. In which
category would the value of north face apparel sales appear? - correct answer ✔✔U.S. GDP
Which variables constitute the largest portion of GDP using the expenditures and income
approaches, respectively? - correct answer ✔✔Consumption; Compensation of employees
complete correct solutions
How will a recession affect a country's PPF? - correct answer ✔✔The country will produce at a
point below an unchanged PPF.
How can a point be achieved outside of the PPF? - correct answer ✔✔This point can never be
achieved.
France can produce 100 violins or 250 electric shavers. Germany can produce 200 violins or 200
electric shavers. Which country has an absolute advantage in electric shaver production? -
correct answer ✔✔Germany
France can produce 100 violins or 250 electric shavers. Germany can produce 200 violins or 300
electric shavers. Which country has the comparative advantage in electric shaver production? -
correct answer ✔✔France
If an economy has a very high but declining unemployment rate and a growth rate that is small
but positive, which phase of the business cycle does this best describe? - correct answer
✔✔Recovery
North Face is a popular U.S. brand. However, most of its apparel is produced in China. In which
category would the value of north face apparel sales appear? - correct answer ✔✔U.S. GDP
Which variables constitute the largest portion of GDP using the expenditures and income
approaches, respectively? - correct answer ✔✔Consumption; Compensation of employees
