E201 GRADE A FULLY ANSWERED QUESTIONS
WITH ANSWERS
When a country has a lower opportunity cost in producing a good than any other
country - (correct answer)Consumption possibilities will increase with specialization and
trade
The United States is capable of producing many goods and services that it imports, but
it does not because - (correct answer)We can import those goods at a lower opportunity
cost than if we make them ourselves
Suppose the production of 12 tons of copper in the United States requires the same
amount of resources as the production of 3 tons of aluminum. In Mexico, 12 tons of
copper requires the same amount of resources as 2 tons of aluminum. Implicitly -
(correct answer)Mexico has a comparative advantage in producing copper
Suppose China can produce 200 TVs or 200 DVD players. South Korea can produce
either 100 TVs or 200 DVD players. In terms of TV production we can conclude that -
(correct answer)China has comparative advantage
Suppose China can produce either 300 telephones or 200 DVD players, and Japan can
produce either 200 telephones or 100 DVD players. Implicitly, Japan has - (correct
answer)A comparative but not necessarily an absolute advantage in telephones
Suppose China can produce either 600 telephones or 200 DVD players, and Japan can
produce either 400 telephones or 200 DVD players, Implicitly, China has - (correct
answer)Both an absolute and a comparative advantage in DVD players
Assume the United States and Canada have the same amount of resources. In a given
time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada
can produce 4 tons of steel or 400 tons of wheat. This means that - (correct
answer)Canada has an absolute advantage in both steel and wheat
WITH ANSWERS
When a country has a lower opportunity cost in producing a good than any other
country - (correct answer)Consumption possibilities will increase with specialization and
trade
The United States is capable of producing many goods and services that it imports, but
it does not because - (correct answer)We can import those goods at a lower opportunity
cost than if we make them ourselves
Suppose the production of 12 tons of copper in the United States requires the same
amount of resources as the production of 3 tons of aluminum. In Mexico, 12 tons of
copper requires the same amount of resources as 2 tons of aluminum. Implicitly -
(correct answer)Mexico has a comparative advantage in producing copper
Suppose China can produce 200 TVs or 200 DVD players. South Korea can produce
either 100 TVs or 200 DVD players. In terms of TV production we can conclude that -
(correct answer)China has comparative advantage
Suppose China can produce either 300 telephones or 200 DVD players, and Japan can
produce either 200 telephones or 100 DVD players. Implicitly, Japan has - (correct
answer)A comparative but not necessarily an absolute advantage in telephones
Suppose China can produce either 600 telephones or 200 DVD players, and Japan can
produce either 400 telephones or 200 DVD players, Implicitly, China has - (correct
answer)Both an absolute and a comparative advantage in DVD players
Assume the United States and Canada have the same amount of resources. In a given
time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada
can produce 4 tons of steel or 400 tons of wheat. This means that - (correct
answer)Canada has an absolute advantage in both steel and wheat
