Principles of Economics – 5th Edition by Frank | Complete Test Bank with Answers

Test Bank For Principles of Economics
5th Edition Frank.




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Chapter02 e
u e u




Comparative Advantage e u




MultipleChoiceQuestions u
e u
e




1. To say that an individual possesses an absolute advantage in the production of
e u e u e u e u e u e u e u e u e u e u e u e u e u




software means that individual: e u e u e u




A. has a lower opportunity cost of producing
e u e u e u e u e u e u e u




software.
B. can produce more and/or higher quality software in a given
e u e u e u e u e u e u e u e u e u e u




amount of time. e u e u




C. was the first to create the s e u e u e u e u e u e u




oftware.
D. charges the lowest price for e u e u e u e u e u




software.

2. If Scout has an absolute advantage over Dill:
eu e u eu eu e u e u eu




A. Scout has more money than e u e u e u e u e u




Dill.
B. the problem of scarcity applies to Dill, but not t
e u e u e u e u e u e u e u e u e u




o Scout. e u




C. the problem of scarcity applies to Scout, but
e u e u e u e u e u e u e u e u




not to Dill. e u e u




D. Scout can accomplish more in a given period of time than e u e u e u e u e u e u e u e u e u e u e u




can Dill. e u




3. If Leslie can produce two pairs of pants in an hour while Eva can make one pair an ho
e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u




ur, then it must be the case that:
e u e u e u e u e u e u e u




A. Leslie has a comparative eu eu eu e u




advantage.
B. Leslie has an absolute e u eu eu e u




advantage.
C. Eva has a comparative e u e u e u e u




advantage.
D. Leslie has both comparative and absolute e u e u e u e u e u




advantage.
e u




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4. If a nation can produce a good more quickly than any other nation, that nation has a
e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u




(n):


A. comparative e




advantage.
u




B. absolute a e u




dvantage.
C. relative ad e u




vantage.
D. specialization e




advantage.u




5. Having a comparative advantage in a particular task means that:
e u e u e u e u e u e u e u e u e u




A. you are better at it than other
e u e u e u e u e u e u e




people.
u




B. you give up more to accomplish that task than do
e u e u e u e u e u e u e u e u e u e u




others.
C. you give up less to accomplish that task than do
e u e u e u e u e u e u e u e u e u e u




others.
D. you have specialized in that task, while others
e u e u e u e u e u e u e u e u




have not. e u




6. Larry has a comparative advantage in writing a term paper if he:
e u e u e u e u e u e u e u e u e u e u e u




A. can write a paper faster than the other students in c
eu eu eu eu eu eu eu eu e u e u




lass.
B. has an absolute advantage in writing a term pa
eu eu eu e u eu eu eu e u




per.
C. always earns an A on his p e u e u e u e u e u e u




apers.
D. has the lowest opportunity cost for writing a
e u e u e u e u e u e u e u e u




term paper. e u




7. If a nation has the lowest opportunity cost of producing a good, that nation has a(n):
e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u




A. comparative e




advantage.
u




B. absolute a e u




dvantage.
C. comparative advantage and an absolute e u e u e u e u e u




advantage.
D. absolute advantage and possibly a comparative a e u e u e u e u e u e u




dvantage.




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8. Which of the following statements is always true? e u e u e u e u e u e u e u




A. Absolute advantage implies comparative a eue u eue u eue u e u




dvantage.
B. Comparative advantage does not require absolute e u e u e u e u e u




advantage.
e u




C. Absolute advantage requires comparative eu eu eu e u




advantage.
D. Comparative advantage requires absolute eu eu eu e u




advantage.

9. If Jane can produce 3 pairs of shoes hourly, while Bob can produce 2, then one can in
e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u e u




fer that the e u advantage belongs to . e u e u e u




A. absolute;
Jane
e u




B. comparative;
Jane
e u




C. comparative; e




Bob u




D. comparative and absolute e u e u




; Jane e u




10.




Refer to the table above. According to the data, Corey has an absolute advantage in:
e u e u e u e u e u e u e u e u e u e u e u e u e u e u




A. the production of e u e u e




pizza.
u




B. neither the production of pizza nor the delivery e u e u e u e u e u e u e u e u




of pizza. e u




C. delivering e




pizza. u




D. both the production of pizza and the delivery e u e u e u e u e u e u e u e u




of pizza. e u




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