Chapter 19 Test Bank
Multiple Choice Questions
1. The slope of the production possibility frontier is determined by the _________ of expanding
production of one good, measured by how much of the other good would be lost.
A. absolute advantage
B. opportunity cost
C. relative advantage
D. specialization
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
2. When one nation can produce a product at lower cost relative to another nation, it is said to
have a(n)____________________in producing that product.
A. relative advantage
B. absolute advantage
C. economy of scale
D. production efficiency
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. Colombia produces coffee with less labor and land than any other country; it therefore
necessarily has:
A. a comparative advantage in coffee production.
B. both a comparative and absolute advantage in coffee production.
C. an absolute advantage and comparative disadvantage in coffee production.
D. an absolute advantage in coffee production
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
4. The idea behind comparative advantage reflects the possibility that one party:
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,A. may be able to produce everything relatively more efficiently than another party.
B. may be able to produce something at a lower dollar cost than another party.
C. with an absolute advantage in producing two different may export goods both of those goods
to the other party.
D. may be able to produce something at a lower opportunity cost than another party.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
5. Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
From the data, the USA:
A. has an absolute advantage over India in the production of textiles.
B. has an absolute advantage over India in the production of wheat.
C. has a comparative advantage in the production of textiles.
D. should export textiles to India.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
6. Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
The opportunity cost of one bushel of wheat in India is:
A. 1 yard of textiles.
B. 3 yards of textiles.
C. 4 yards of textiles.
D. 12 yards of textiles.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
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, 7. The slope of the production possibility frontier is determined by the ________________ of
expanding production of one good, measured by how much of the other good would be lost.
A. absolute advantage
B. relative cost
C. opportunity cost
D. comparative advantage
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
8. In India one person can produce 330 pounds of rice or 110 shirts in one year. In China one
person can produce 400 pounds of rice or 200 shirts in one year. Which of the following
statements is true?
A. India has a comparative advantage in the production of rice.
B. China has a comparative advantage in the production of rice.
C. China has both an absolute and comparative advantage in the production of rice.
D. India has an absolute advantage in the production of rice.
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Analyze
9. Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16
oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta,
respectively, are:
A. 0.25 apples; 0.5 apples.
B. 9 apples; 4 apples.
C. 0.5 apples; 0.25 apples.
D. 2 apples; 4 apples
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Apply
10. Which of the following is true?
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Multiple Choice Questions
1. The slope of the production possibility frontier is determined by the _________ of expanding
production of one good, measured by how much of the other good would be lost.
A. absolute advantage
B. opportunity cost
C. relative advantage
D. specialization
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Remember
2. When one nation can produce a product at lower cost relative to another nation, it is said to
have a(n)____________________in producing that product.
A. relative advantage
B. absolute advantage
C. economy of scale
D. production efficiency
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
3. Colombia produces coffee with less labor and land than any other country; it therefore
necessarily has:
A. a comparative advantage in coffee production.
B. both a comparative and absolute advantage in coffee production.
C. an absolute advantage and comparative disadvantage in coffee production.
D. an absolute advantage in coffee production
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
4. The idea behind comparative advantage reflects the possibility that one party:
This file is copyright 2023, Rice University. All Rights Reserved.
,A. may be able to produce everything relatively more efficiently than another party.
B. may be able to produce something at a lower dollar cost than another party.
C. with an absolute advantage in producing two different may export goods both of those goods
to the other party.
D. may be able to produce something at a lower opportunity cost than another party.
Answer: D
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
5. Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
From the data, the USA:
A. has an absolute advantage over India in the production of textiles.
B. has an absolute advantage over India in the production of wheat.
C. has a comparative advantage in the production of textiles.
D. should export textiles to India.
Answer: B
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
6. Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
The opportunity cost of one bushel of wheat in India is:
A. 1 yard of textiles.
B. 3 yards of textiles.
C. 4 yards of textiles.
D. 12 yards of textiles.
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Understand
This file is copyright 2023, Rice University. All Rights Reserved.
, 7. The slope of the production possibility frontier is determined by the ________________ of
expanding production of one good, measured by how much of the other good would be lost.
A. absolute advantage
B. relative cost
C. opportunity cost
D. comparative advantage
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Remember
8. In India one person can produce 330 pounds of rice or 110 shirts in one year. In China one
person can produce 400 pounds of rice or 200 shirts in one year. Which of the following
statements is true?
A. India has a comparative advantage in the production of rice.
B. China has a comparative advantage in the production of rice.
C. China has both an absolute and comparative advantage in the production of rice.
D. India has an absolute advantage in the production of rice.
Answer: A
Reference:
Explanation:
Type: Multiple Choice Difficulty: Medium Category: Analyze
9. Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16
oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta,
respectively, are:
A. 0.25 apples; 0.5 apples.
B. 9 apples; 4 apples.
C. 0.5 apples; 0.25 apples.
D. 2 apples; 4 apples
Answer: C
Reference:
Explanation:
Type: Multiple Choice Difficulty: Easy Category: Apply
10. Which of the following is true?
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