Test Bank For Brief Principles of Macroeconomics 7th Edition by N. Gregory Mankiw

Interdependence and the Gains from Trade Multiple Choice – Section 00: Introduction 1. People who provide you with goods and services a. are acting out of generosity. b. do so because they get something in return. c. have chosen not to become interdependent. d. are required to do so by the government. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Easy ECON.MANK.15.11 - LO: 3-0 United States - BUSPROG: Analytic DISC: General Principles BLOOM'S: Knowledge 2. When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all a. rely upon the government to provide us with the basic necessities of life. b. rely upon one another for the goods and services we consume. c. have similar tastes and abilities. d. are concerned about one another’s wellbeing. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Easy ECON.MANK.15.11 - LO: 3-0 United States - BUSPROG: Analytic DISC: Thinking Like an Economist BLOOM'S: Knowledge © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 488 Interdependence and the Gains from Trade Multiple Choice – Section 01: A Parable for the Modern Economy 1. Which of the following is not a reason people choose to depend on others for goods and services? a. to improve their lives b. to allow them to enjoy a greater variety of goods and services c. to consume more of each good without working any more hours d. to allow people to produce ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: outside their production possibilities frontiers d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Comprehension 2. When can two countries gain from trading two goods? a. when the first country can only produce the first good and the second country can only produce the second good b. 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 c. when the first country is better at producing both goods and the second country is worse at producing both goods d. Two countries could gain from trading two goods under all of the above conditions. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 489 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 a. benefit both Steve and Tom. b. benefit Steve, but not Tom. c. benefit Tom, but not Steve. d. benefit neither Steve nor Tom. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Application r 4. Olivia bakes cakes and Andrew grows corn. Olivia and Andrew both like to eat cake and eat corn. In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade? a. Olivia cannot grow corn and Andrew cannot bake cakes. b. Olivia is better than Andrew at baking cakes and Andrew is better than Olivia at growing corn. c. Olivia is better than Andrew at baking cakes and at growing corn. d. Both Olivia and Andrew can benefit from trade in all of the above cases. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Application r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 490 Interdependence and the Gains from Trade 5. 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? a. Abby does not like flowers and Liam does not like brownies. b. Abby is better than Liam at baking brownies and Liam is better than Abby at growing flowers. c. Liam is better than Abby at baking brownies and at growing flowers. d. Both Abby and Liam can benefit from trade in all of the above cases. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Application r 6. The production possibilities frontier illustrates a. the combinations of output that an economy should produce. b. the combinations of output that an economy should consume. c. the combinations of output that an economy can produce. d. All of the above are correct. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 491 7. An economy’s production possibilities frontier is also its consumption possibilities frontier a. under all circumstances. b. under no circumstances. c. when the economy is self-sufficient. d. when the rate of tradeoff between the two goods being produced is constant. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Comprehension 8. A production possibilities frontier is bowed outward when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b. an economy is self-sufficient instead of interdependent and engaged in trade. c. the rate of tradeoff between the two goods being produced is constant. d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Tradeoffs BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 492 Interdependence and the Gains from Trade 9. A production possibilities frontier is a straight line when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b. an economy is interdependent and engaged in trade instead of self-sufficient. c. the rate of tradeoff between the two goods being produced is constant. d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: United States - BUSPROG: Analytic DISC: Production Possibilities Model Tradeoffs BLOOM'S: Comprehension c 1 Difficulty: Moderate 10. Consider two individuals — Marquis and Serena — each of whom would like to wear sweaters and eat tasty food. The gains from trade between Marquis and Serena are most obvious in which of the following cases? a. Marquis is very good at knitting sweaters and at cooking tasty food, but Serena’s skills in both of these activities are very poor. b. Marquis and Serena both are very good at cooking tasty food, but neither has the necessary skills to knit a sweater. c. Marquis’s cooking and knitting skills are very poor, and Serena’s cooking and knitting skills are also very poor. d. Marquis’s skills are such that he can produce only sweaters, and Serena’s skills are such that she can produce only tasty food. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 493 11. Consider two individuals — Howard and Mai — each of whom would like to wear sweaters and eat tasty food. The gains from trade between Howard and Mai are least obvious in which of the following cases? a. Howard is very good at knitting sweaters and at cooking tasty food, but Mai’s skills in both of these activities are very poor. b. Howard is very good at knitting sweaters and at cooking tasty food; Mai is very good at knitting sweaters, but she knows nothing about cooking tasty food. c. Howard’s skills in knitting sweaters are fairly good, but his skills in cooking tasty food are fairly bad; Mai’s skills in knitting sweaters are fairly bad, but her skills in cooking tasty food are fairly good. d. Howard’s skills are such that he can produce only sweaters, and Mai’s skills are such that she can produce only tasty food. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Comprehension a 1 Difficulty: Moderate 12. A professor spends 10 hours per day giving lectures and writing papers. For the professor, a graph that shows his various possible mixes of output (lectures given per day and papers written per day) is called his a. line of tastes. b. trade-off curve. c. production possibilities frontier. d. consumption possibilities frontier. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Knowledge r c 1 Difficulty: Easy © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 494 Interdependence and the Gains from Trade 13. Suppose there are only two people in the world. Each person’s production possibilities frontier also represents his or her consumption possibilities when a. neither person faces trade-offs. b. the frontiers are straight lines. c. the frontiers are bowed out. d. they choose not to trade with one another. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Comprehension 14. The most obvious benefit of specialization and trade is that they allow us to a. work more hours per week than we otherwise would be able to work. b. consume more goods than we otherwise would be able to consume. c. spend more money on goods that are beneficial to society, and less money on goods that are harmful to society. d. consume more goods by forcing people in other countries to consume fewer goods. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Easy ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 495 15. As a student, Anne spends 40 hours per week writing term papers and completing homework assignments. On one axis of her production possibilities frontier is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. Anne’s production possibilities frontier is a straight line if a. she faces no trade-off between writing term papers and completing homework assignments. b. she can switch between writing term papers and completing homework assignments at a constant rate. c. the rate at which she can switch between homework assignments and term papers depends on the number of homework assignments she is completing and on the number of term papers she is writing. d. she is required by her professors to spend half of her time on term papers and the other half of her time on homework assignments. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Comprehension 16. For a self-sufficient producer, the production possibilities frontier a. is the same as the consumption possibilities frontier. b. is greater than the consumption possibilities frontier. c. is less than the consumption possibilities frontier. d. is always a straight line. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: a 1 Difficulty: Easy ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Knowledge © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 496 Interdependence and the Gains from Trade Table 3-1 Assume that John and Jane can switch between producing bread and wine at a constant rate. 17. Refer to Table 3-1. Assume that John and Jane each work 24 hours. What happens to total production if instead of each person spending 12 hours producing each good, Jane spends 21 hours producing wine and 3 hours producing bread and John spends 3 hours producing wine and 21 hours producing bread? a. The total production of bread and wine each rise. b. The total production of bread rises and the total production of wine falls. c. The total production of bread falls and the total production of wine rises. d. The total production of bread and wine each fall. Labor Hours Needed to Make Bottle of Wine Loaf of Bread Jane 2 1.5 John 3 1 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-2 a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application Assume that England and Holland can switch between producing milk and oats at a constant rate. Number of Units Produced in an Hour Milk Oats England 10 4 Holland 8 6 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 497 18. Refer to Table 3-2. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Holland. If we were to do this, measuring milk along the horizontal axis, then a. the slope of England’s production possibilities frontier would be 10/4 and the slope of Holland’s production possibilities frontier would be -4/3. b. the slope of England’s production possibilities frontier would be 4/10 and the slope of Holland’s production possibilities frontier would be -3/4. c. the slope of England’s production possibilities frontier would be 10/4 and the slope of Holland’s production possibilities frontier would be 4/3. d. the slope of England’s production possibilities frontier would be 4/10 and the slope of Holland’s production possibilities frontier would be 3/4. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-3 Production Opportunities b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis Hours Needed to Make 1 Unit of Number of Units Produced in 40 Hours Cheese Wine Cheese Wine England 1 4 40 10 France 5 2 8 20 19. Refer to Table 3-3. Assume that England and France each has 40 labor hours available. If each country divides its time equally between the production of cheese and wine, then total production is a. 8 units of cheese and 10 units of wine b. 24 units of cheese and 15 units of wine c. 40 units of cheese and 20 units of wine d. 48 units of cheese and 30 units of wine b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: 498 Interdependence and the Gains from Trade 20. Refer to Table 3-3. Which of the following combinations of cheese and wine could France produce in 40 hours? a. 2 units of cheese and 20 units of wine b. 4 units of cheese and 15 units of wine c. 6 units of cheese and 5 units of wine d. 8 units of cheese and 20 units of wine ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis 21. Refer to Table 3-3. Which of the following combinations of cheese and wine could England not produce in 40 hours? a. 12 units of cheese and 7 units of wine b. 16 units of cheese and 6 units of wine c. 20 units of cheese and 5 units of wine d. 26 units of cheese and 4 units of wine ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 499 22. Refer to Table 3-3. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for France. If we were to do this, measuring cheese along the horizontal axis, then a. the slope of England’s production possibilities frontier would be 4 and the slope of France’s production possibilities frontier would be -0.4. b. the slope of England’s production possibilities frontier would be 0.25 and the slope of France’s production possibilities frontier would be -2.5. c. the slope of England’s production possibilities frontier would be 0.25 and the slope of France’s production possibilities frontier would be 2.5. d. the slope of England’s production possibilities frontier would be 4 and the slope of France’s production possibilities frontier would be 0.4. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis 23. Refer to Table 3-3. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for France. If we were to do this, measuring wine along the horizontal axis, then a. the slope of England’s production possibilities frontier would be 4 and the slope of France’s production possibilities frontier would be -0.4. b. the slope of England’s production possibilities frontier would be 0.25 and the slope of France’s production possibilities frontier would be -2.5. c. the slope of England’s production possibilities frontier would be 0.25 and the slope of France’s production possibilities frontier would be 2.5. d. the slope of England’s production possibilities frontier would be 4 and the slope of France’s production possibilities frontier would be 0.4. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 500 Interdependence and the Gains from Trade Table 3-4 Assume that Andrea and Paul can switch between producing wheat and producing beef at a constant rate. 24. Refer to Table 3-4. Assume that Andrea and Paul each has 480 minutes available. If each person divides his time equally between the production of wheat and beef, then total production is a. 24 bushels of wheat and 64 pounds of beef. b. 21 bushels of wheat and 33 pounds of beef. c. 16 bushels of wheat and 48 pounds of beef. d. 5 bushels of wheat and 24 pounds of beef. Minutes Needed to Make 1 Bushel of Wheat Pound of Beef Andrea 30 15 Paul 15 5 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application r a 1 Difficulty: Moderate 25. Refer to Table 3-4. Which of the following combinations of wheat and beef could Andrea produce in one 8-hour day? a. 16 bushels of wheat and 32 pounds of beef b. 9 bushels of wheat and 25 pounds of beef c. 7 bushels of wheat and 15 pounds of beef d. 10 bushels of wheat and 13 pounds of beef c 1 Difficulty: Challenging ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 501 26. Refer to Table 3-4. Which of the following combinations of wheat and beef could Paul not produce in one 8-hour day? a. 13 bushels of wheat and 60 pounds of beef b. 20 bushels of wheat and 30 pounds of beef c. 20 bushels of wheat and 20 pounds of beef d. 25 bushels of wheat and 15 pounds of beef ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: Table 3-5 a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Labor Hours Needed to Make 1 Cooler Radio Aruba 2 5 Iceland 1 4 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 502 Interdependence and the Gains from Trade 27. Refer to Table 3-5. Which of the following represents Aruba's production possibilities frontier when 100 labor hours are available? a. b. c. d. © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 503 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 504 Interdependence and the Gains from Trade 28. Refer to Table 3-5. Which of the following represents Iceland's production possibilities frontier when 100 labor hours are available? a. b. c. d. © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 505 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application 29. Refer to Table 3-5. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is a. 28 coolers and 50 radios. b. 30 coolers and 9 radios. c. 60 coolers and 18 radios. d. 120 coolers and 36 radios. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application 30. Refer to Table 3-5. Which of the following combinations of coolers and radios could Aruba produce in one 40- hour week? a. 3 coolers and 7 radios b. 5 coolers and 6 radios c. 11 coolers and 4 radios d. 13 coolers and 3 radios ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 506 Interdependence and the Gains from Trade Table 3-6 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. Machine Minutes Needed to Make 1 Toothbrush Hairbrush Zimbabwe 3 10 Portugal 5 6 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 507 31. Refer to Table 3-6. Which of the following represents Zimbabwe’s and Portugal’s production possibilities frontiers when each country has 60 minutes of machine time available? a. Zimbabwe Portugal b. Zimbabwe Portugal c. Zimbabwe Portugal d. Zimbabwe Portugal © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 508 Interdependence and the Gains from Trade ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application 32. Refer to Table 3-6. Assume that Zimbabwe and Portugal each has 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is a. 24 toothbrushes and 12 hairbrushes. b. 48 toothbrushes and 24 hairbrushes. c. 96 toothbrushes and 48 hairbrushes. d. 720 toothbrushes and 1440 hairbrushes. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application 33. Refer to Table 3-6. Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes? a. 1 toothbrush and 4 hairbrushes b. 4 toothbrushes and 2 hairbrushes c. 5 toothbrushes and 6 hairbrushes d. 6 toothbrushes and 5 hairbrushes ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 509 34. Refer to Table 3-6. Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes? a. 5 toothbrushes and 11 hairbrushes b. 10 toothbrushes and 9 hairbrushes c. 20 toothbrushes and 6 hairbrushes d. 30 toothbrushes and 3 hairbrushes ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-7 a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. 35. Refer to Table 3-7. Assume that the farmer and the rancher each has 24 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is a. 6 pounds of meat and 4.5 pounds of potatoes. b. 5.5 pounds of meat and 8 pounds of potatoes. c. 12 pounds of meat and 9 pounds of potatoes. d. 5 pounds of meat and 5.5 pounds of potatoes. Labor Hours Needed to Make 1 Pound of Pounds Produced in 24 Hours Meat Potatoes Meat Potatoes Farmer 6 4 4 6 Rancher 3 8 8 3 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 510 Interdependence and the Gains from Trade 36. Refer to Table 3-7. Which of the following combinations of meat and potatoes could the farmer produce in 24 hours? a. 1 pound of meat and 8 pounds of potatoes. b. 2 pounds of meat and 2 pounds of c. 1 pounds of meat and 5 pounds of d. 3 pounds of meat and 2 pounds of ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: potatoes. potatoes. potatoes. b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r 37. Refer to Table 3-7. Which of the following combinations of meat and potatoes could the rancher not produce in 24 hours? a. 5 pounds of meat and 1 pounds of potatoes. b. 2 pounds of meat and 2 pounds of potatoes. c. 1 pounds of meat and 3 pounds of potatoes. d. 4 pounds of meat and 1 pound of potatoes. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 511 Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. 38. Refer to Table 3-8. Assume that England and Spain each has 24 labor hours available. If each country divides its time equally between the production of cheese and bread, then total production is a. 10 units of cheese and 6 units of bread. b. 25 units of cheese and 7.5 units of bread. c. 20 units of cheese and 12 units of bread. d. 12 units of cheese and 8 units of bread. Labor Hours Needed to Make 1 Unit of Number of Units Produced in 24 Hours Cheese Bread Cheese Bread England 2 3 12 8 Spain 3 6 8 4 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application r 39. Refer to Table 3-8. Which of the following combinations of cheese and bread could Spain produce in 24 hours? a. 4 units of cheese and 3 units of bread. b. 6 units of cheese and 1 units of bread. c. 7 units of cheese and 1.5 units of bread. d. 3 units of cheese and 3 units of bread. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 512 Interdependence and the Gains from Trade NOTES: r 40. Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours? a. 5 units of cheese and 3 units of bread. b. 6 units of cheese and 4 units of bread. c. 8 units of cheese and 3 units of bread. d. 7 units of cheese and 2 units of bread. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r 41. Refer to Table 3-8. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring cheese along the horizontal axis, then a. the slope of England’s production possibilities frontier would be 0.67 and the slope of Spain’s production possibilities frontier would be -0.5. b. the slope of England’s production possibilities frontier would be 1.5 and the slope of Spain’s production possibilities frontier would be -2. c. the slope of England’s production possibilities frontier would be .75 and the slope of Spain’s production possibilities frontier would be -1. d. the slope of England’s production possibilities frontier would be 2 and the slope of Spain’s production possibilities frontier would be -.5. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 513 42. Refer to Table 3-8. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring bread along the horizontal axis, then a. the slope of England’s production possibilities frontier would be 0.67 and the slope of Spain’s production possibilities frontier would be -0.5. b. the slope of England’s production possibilities frontier would be 1.5 and the slope of Spain’s production possibilities frontier would be -2. c. the slope of England’s production possibilities frontier would be .75 and the slope of Spain’s production possibilities frontier would be -1. d. the slope of England’s production possibilities frontier would be 2 and the slope of Spain’s production possibilities frontier would be -.5. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: Table 3-9 b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Hours Needed To Make Amount Produced in 60 Hours 1 mixer toaster mixers toasters Maya 6 3 10 20 Miguel 10 5 6 12 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 514 Interdependence and the Gains from Trade 43. Refer to Table 3-9. Assume that Maya and Miguel each has 60 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is a. 8 mixers and 16 toasters. b. 3.5 mixers and 6 toasters. c. 15 mixers and 9 toasters. d. 20 mixers and 12 toasters. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application r 44. Refer to Table 3-9. Which of the following combinations of mixers and toasters could Maya produce in 60 hours? a. 5 mixers and 12 toasters. b. 6 mixers and 4 toasters. c. 7 mixers and 7 toasters. d. 8 mixers and 5 toasters. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 515 45. Refer to Table 3-9. Which of the following combinations of mixers and toasters could Miguel not produce in 80 hours? a. 5 mixers and 6 toasters. b. 6 mixers and 5 toasters. c. 7 mixers and 2 toasters. d. 4 mixers and 8 toasters. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r 46. Refer to Table 3-9. We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel. If we were to do this, measuring mixers along the horizontal axis, then a. the slope of Maya’s production possibilities frontier would be 2 and the slope of Miguel’s production possibilities frontier would be -2. b. the slope of Maya’s production possibilities frontier would be 0.5 and the slope of Miguel’s production possibilities frontier would be -0.5. c. the slope of Maya’s production possibilities frontier would be 1.67 and the slope of Miguel’s production possibilities frontier would be -1.67. d. the slope of Maya’s production possibilities frontier would be 0.6 and the slope of Miguel’s production possibilities frontier would be -0.6. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 516 Interdependence and the Gains from Trade 47. Refer to Table 3-9. We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel. If we were to do this, measuring toasters along the horizontal axis, then a. the slope of Maya’s production possibilities frontier would be 2 and the slope of Miguel’s production possibilities frontier would be -2. b. the slope of Maya’s production possibilities frontier would be 0.5 and the slope of Miguel’s production possibilities frontier would be -0.5. c. the slope of Maya’s production possibilities frontier would be 1.67 and the slope of Miguel’s production possibilities frontier would be -1.67. d. the slope of Maya’s production possibilities frontier would be 0.6 and the slope of Miguel’s production possibilities frontier would be -0.6. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: Table 3-10 b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. Hours Needed to Make Quantity Produced in 2400 Hours 1 Car Airplane Cars Airplanes Japan 30 150 80 16 Korea 50 150 48 16 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 517 48. Refer to Table 3-10. Assume that Japan and Korea each has 2400 hours available. If each country divides its time equally between the production of cars and airplanes, then total production is a. 40 cars and 8 airplanes. b. 64 cars and 16 airplanes. c. 80 cars and 16 airplanes. d. 128 cars and 32 airplanes. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application 49. Refer to Table 3-10. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring cars along the horizontal axis, then a. the slope of Japan’s production possibilities frontier would be 5 and the slope of Korea’s production possibilities frontier would be -3. b. the slope of Japan’s production possibilities frontier would be 0.2 and the slope of Korea’s production possibilities frontier would be -0.33. c. the slope of Japan’s production possibilities frontier would be 0.2 and the slope of Korea’s production possibilities frontier would be 0.33. d. the slope of Japan’s production possibilities frontier would be 5 and the slope of Korea’s production possibilities frontier would be 3. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 518 Interdependence and the Gains from Trade 50. Refer to Table 3-10. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring airplanes along the horizontal axis, then a. the slope of Japan’s production possibilities frontier would be 5 and the slope of Korea’s production possibilities frontier would be -3. b. the slope of Japan’s production possibilities frontier would be 0.2 and the slope of Korea’s production possibilities frontier would be -0.33. c. the slope of Japan’s production possibilities frontier would be 0.2 and the slope of Korea’s production possibilities frontier would be 0.33. d. the slope of Japan’s production possibilities frontier would be 5 and the slope of Korea’s production possibilities frontier would be 3. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-11 a 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis Assume that Max and Min can switch between producing mittens and producing hats at a constant rate. Labor Hours Needed to Make 1 Quantity Produced in 36 Hours Mittens Hats Mittens Hats Max 2 6 18 6 Min 2 4 18 9 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 519 51. Refer to Table 3-11. Assume that Max and Min each has 36 labor hours available. If each person divides his/her time equally between the production of mittens and hats, then total production is a. 18 mittens and 6 hats. b. 18 mittens and 7.5 hats. c. 16 mittens and 12 hats. d. 36 mittens and 15 hats. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application r 52. Refer to Table 3-11. Which of the following points would not be on Max’s production possibilities frontier, based on a 36-hour production period? a. (18 mittens, 0 hats) b. (12 mittens, 2 hats) c. (6 mittens, 4 hats) d. (2 mittens, 6 hats) ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: d 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 520 Interdependence and the Gains from Trade 53. Refer to Table 3-11. Which of the following points would be on Min's production possibilities frontier, based on a 36-hour production period? a. (3 mittens, 8 hats) b. (8 mittens, 5 hat) c. (10 mittens, 4 hats) d. More than one of the above would be on Min’s production possibilities frontier. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: Table 3-12 d 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Minutes Needed to Number of Computers Set Up or Tested in a 40-Hour Week Set Up 1 Computer Test 1 Computer Computers Set Up Computers Tested Barb 48 ? 50 40 Jim 30 40 80 60 54. Refer to Table 3-12. The number of minutes needed by Barb to test a computer is a. 36. b. 48. c. 60. d. 64. c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 521 55. Refer to Table 3-12. Which of the following points would not be on Barb's production possibilities frontier, based on a 40-hour week? a. (0 computers set up, 40 computers tested) b. (8 computers set up, 32 computers tested) c. (25 computers set up, 20 computers tested) d. (30 computers set up, 16 computers tested) ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis 56. Refer to Table 3-12. Which of the following points would not be on Jim's production possibilities frontier, based on a 40-hour week? a. (0 computers set up, 60 computers tested) b. (40 computers set up, 30 computers tested) c. (60 computers set up, 12 computers tested) d. (72 computers set up, 6 computers tested) ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-13 c 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. Minutes Needed to Number of Cellular Phones Programmed or Tested in a 40-Hour Week Program 1 Cellular Test 1 Cellular Cellular Phones Programmed Cellular Phones Tested Juanita Phone ? Phone 2 160 1200 Shantala 10 4 240 600 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 522 Interdependence and the Gains from Trade 57. Refer to Table 3-13. The number of minutes needed by Juanita to program a cellular phone is a. 4. b. 5. c. 7.5. d. 15. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application 58. Refer to Table 3-13. Which of the following points would be on Juanita's production possibilities frontier, based on a 40-hour week? a. (120 cellular phones programmed, 295 cellular phones tested) b. (130 cellular phones programmed, 225 cellular phones tested) c. (140 cellular phones programmed, 155 cellular phones tested) d. Both (a) and (b) would be on Juanita’s production possibilities frontier. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 523 59. Refer to Table 3-13. Which of the following points would be on Shantala's production possibilities frontier, based on a 40-hour week? a. (120 cellular phones programmed, 250 cellular phones tested) b. (180 cellular phones programmed, 150 cellular phones tested) c. (240 cellular phones programmed, 600 cellular phones tested) d. More than one of the above would be on Shantala’s production possibilities frontier. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-14 b 1 Difficulty: Challenging ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis Assume that Nick and Faldo can switch between producing wheat and producing cloth at a constant rate. 60. Refer to Table 3-14. Assume that Nick and Faldo each has 2 hours available. If each person divides his time equally between the production of wheat and cloth, then total production is a. 8 bushels of wheat and 15 yards of cloth. b. 14 bushels of wheat and 27 yards of cloth. c. 16 bushels of wheat and 30 yards of cloth. d. 28 bushels of wheat and 34 yards of cloth. Quantity Produced in 1 Hour Bushels of Wheat Yards of Cloth Nick 8 12 Faldo 6 15 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 524 Interdependence and the Gains from Trade Table 3-15 Labor Hours Needed to Make 1 Pound of: Amount Produced in 40 hours Meat Potatoes Meat Potatoes Farmer 8 hours/pound 5 hours/pound 5 pounds 8 pounds Rancher 4 hours/pound 10 hours/pound 10 pounds 4 pounds 61. Refer to Table 3-15. Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is a. 5 pounds of meat and 4 pounds of potatoes. b. 6 pounds of meat and 7.5 pounds of potatoes. c. 7.5 pounds of meat and 6 pounds of potatoes. d. 10 pounds of meat and 8 pounds of potatoes. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: United States - BUSPROG: Analytic DISC: Production Possibilities Model Productive Efficiency BLOOM'S: Application c 1 Difficulty: Moderate 62. Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours? a. 1 pound of meat and 7 pounds of potatoes. b. 2 pounds of meat and 5 pounds of potatoes. c. 3 pounds of meat and 3 pounds of potatoes. d. 4 pounds of meat and 2 pounds of potatoes. c 1 Difficulty: Challenging ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 525 63. Refer to Table 3-15. Which of the following combinations of meat and potatoes could the rancher not produce in 40 hours? a. 2 pounds of meat and 3 pounds of potatoes. b. 3 pounds of meat and 3 pounds of potatoes. c. 4 pounds of meat and 2 pounds of potatoes. d. 5 pounds of meat and 2 pound of potatoes. b 1 Difficulty: Challenging ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: Table 3-16 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis The following table contains some production possibilities for an economy for a given month. 64. Refer to Table 3-16. If the production possibilities frontier is bowed outward, then “?” could be a. 200. b. 300. c. 400. d. 500. Blankets Coats 8 600 12 ? 16 200 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r d 1 Difficulty: Moderate © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 526 Interdependence and the Gains from Trade 65. Refer to Table 3-16. If the production possibilities frontier is a straight line, then “?” must be a. 200. b. 300. c. 400. d. 500. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r Table 3-17 The following table contains some production possibilities for an economy for a given year. 66. Refer to Table 3-17. If the production possibilities frontier is bowed outward, then “?” could be a. 180. b. 200. c. 220 d. 240. a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r Cakes Pies 10 600 20 400 30 ? ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 527 67. Refer to Table 3-17. If the production possibilities frontier is a straight line, then “?” must be a. 180. b. 200. c. 220. d. 240. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r Table 3-18 The following table contains some production possibilities for an economy for a given month. 68. Refer to Table 3-18. If the production possibilities frontier is bowed outward, then “?” could be a. 150. b. 225. c. 300. d. 375. d 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r Apples Oranges 120 450 180 ? 240 150 ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 528 Interdependence and the Gains from Trade 69. Refer to Table 3-18. If the production possibilities frontier is a straight line, then “?” must be a. 150. b. 225. c. 300. d. 375. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r Table 3-19 Summary of the Gains from Trade Alice Betty Lemonade (in pitchers) Pizzas Lemonade (in pitchers) Pizzas Without Trade Production and Consumption 200 100 180 180 With Trade Production 400 0 0 300 Trade Gives 193 Gets 110 Gets 193 Gives 110 Consumption a b c d Gains from Trade e f g h © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 529 70. Refer to Table 3-19. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty’s gains from specialization and trade? a. Alice gains 7 pitchers of lemonade and 10 pizzas, while Betty gains 13 pitchers of lemonade and 10 pizzas. b. Alice gains 200 pitchers of lemonade and 100 pizzas, while Betty gains 180 pitchers of lemonade and 180 pizzas. c. Alice gains 207 pitchers of lemonade and 110 pizzas, while Betty gains 193 pitchers of lemonade and 190 pizzas. d. Alice gains 400 pitchers of lemonade and 0 pizzas, while Betty gains 0 pitchers of lemonade and 300 pizzas. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: Figure 3-1 Panel (a) United States - BUSPROG: Analytic DISC: International Trade BLOOM'S: Application Panel (b) a 1 Difficulty: Moderate © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 530 Interdependence and the Gains from Trade 71. Refer to Figure 3-1. The rate of tradeoff between producing chairs and producing couches is constant in a. Panel (a). b. Panel (b). c. both Panel (a) and Panel (b). d. neither Panel (a) nor Panel (b). ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Tradeoffs BLOOM'S: Comprehension 72. Refer to Figure 3-1. The rate of tradeoff between producing chairs and producing couches depends on how many chairs and couches are being produced in a. Panel (a). b. Panel (b). c. both Panel (a) and Panel (b). d. neither Panel (a) nor Panel (b). ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Tradeoffs BLOOM'S: Comprehension © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 531 Figure 3-2 Brazil’s Production Possibilities Frontier 73. Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that a. for Brazil, it is more costly to produce peanuts than it is to produce cashews. b. Brazil will produce more peanuts and fewer cashews as time goes by. c. Brazil faces a tradeoff between producing peanuts and producing cashews. d. Brazil should specialize in producing cashews. ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model Tradeoffs BLOOM'S: Comprehension r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 532 Interdependence and the Gains from Trade 74. Refer to Figure 3-2. If the production possibilities frontier shown is for 24 hours of production, then how long does it take Brazil to make one peanut? a. 1/10 hour b. 1/3 hour c. 3 hours d. 10 hours ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: c 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r 75. Refer to Figure 3-2. If the production possibilities frontier shown is for 24 hours of production, then how long does it take Brazil to make one cashew? a. 1/10 hour b. 1/3 hour c. 3 hours d. 10 hours ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: a 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Application r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Interdependence and the Gains from Trade 533 76. Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil produce in two months? a. 7 peanuts and 35 cashews b. 5 peanuts and 100 cashews c. 2 peanuts and 190 cashews d. 3 peanuts and 150 cashews d 1 Difficulty: Challenging ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r 77. Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil not produce in two months? a. 5 peanuts and 88 cashews b. 4 peanuts and 115 cashews c. 3 peanuts and 155 cashews d. 1 peanuts and 200 cashews c 1 Difficulty: Challenging ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL STANDARDS: TOPICS: KEYWORDS: NOTES: United States - BUSPROG: Analytic DISC: Production Possibilities Model BLOOM'S: Analysis r © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 534 Interdependence and the Gains from Trade Figure 3-3 Arturo’s Production Possibilities Frontier Dina’s Production Possibilities Frontier 78. Refer to Figure 3-3. If Dina must work 0.25 hour to produce each taco, then her production possibilities frontier is based on how many hours of work? a. 40 hours b. 100 hours c. 400 hours d. 1600 hours ANSWER: POINTS: DIFFICULTY: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b 1 Difficulty: Moderate ECON.MANK.15.12 - LO: 3-1 Uni