MBA 680 QUIZ 2 | QUESTIONS
AND ANSWERS | 2026 UPDATE
| 100% CORRECT.
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,The following figure shows the production-possibility curves for Canada (AB) and the rest of
the world (CD). Suppose Canada begins to trade with the rest of the world. If, in the
international market, one bushel of corn is exchanged for one liter of maple syrup, Canada
will produce _____ bushels of corn and the rest of the world will produce _____ liters of
maple syrup.
A. 35; 32.5
B. 0; 0
C. 70; 50
D. 90; 100
B. 0; 0
*Graph 1*
The table below shows the number of umbrellas and bushels of corn produced in the United
Kingdom and the rest of the world per labor hour. If the United Kingdom and the rest of the
world begin to trade with each other, the international price of umbrellas will lie between
_____ and _________.
Productivity -> UK -> World
Umbrellas/LH -> 0.25 -> 1.00
BushCorn/LH -> 0.50 -> 0.67
2/3 of a bushel of corn per umbrella; two bushels of corn per umbrella.
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. What is the relative price of
cheese (the price of cheese in terms of wine) in France under a no-trade situation?
,LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
Two gallons of wine per pound
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. The opportunity cost of producing
cheese in the United States is
LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
0.25 gallon of wine.
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. The United States has an absolute
advantage in the production of
LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
Only cheese.
Consider a two-country, two-commodity model. The table below shows the units of Good X
and Good Y produced in Country A and Country B per labor hour. If Country B transfers one
, labor hour from the production of Good X to the production of Good Y, total world
production of Good Y will _____ by _____ unit(s).
Productivity -> Country A -> Country B
Good X -> 1.00 -> 0.50
Good Y -> 0.20 -> 0.70
increase; 0.7
Vineland and Moonited Republic produce wine and cheese. The opportunity cost for the
production of a bottle of wine in Vineland is two pounds of cheese, and in the Moonited
Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that
Vineland has a comparative advantage in the production of wine.
Labor productivity refers to:
the number of units of output a worker can produce in one hour.
When Adam Smith presented his theory of absolute advantage, he assumed that all "value"
in an economy was determined by and measured in terms of the _____ used in the
production of the various goods.
labor hours
If Country X has higher labor productivity in the production of umbrellas than the rest of the
world, we would say that Country X has a(n) _____ in the production of umbrellas.
absolute advantage
AND ANSWERS | 2026 UPDATE
| 100% CORRECT.
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,The following figure shows the production-possibility curves for Canada (AB) and the rest of
the world (CD). Suppose Canada begins to trade with the rest of the world. If, in the
international market, one bushel of corn is exchanged for one liter of maple syrup, Canada
will produce _____ bushels of corn and the rest of the world will produce _____ liters of
maple syrup.
A. 35; 32.5
B. 0; 0
C. 70; 50
D. 90; 100
B. 0; 0
*Graph 1*
The table below shows the number of umbrellas and bushels of corn produced in the United
Kingdom and the rest of the world per labor hour. If the United Kingdom and the rest of the
world begin to trade with each other, the international price of umbrellas will lie between
_____ and _________.
Productivity -> UK -> World
Umbrellas/LH -> 0.25 -> 1.00
BushCorn/LH -> 0.50 -> 0.67
2/3 of a bushel of corn per umbrella; two bushels of corn per umbrella.
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. What is the relative price of
cheese (the price of cheese in terms of wine) in France under a no-trade situation?
,LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
Two gallons of wine per pound
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. The opportunity cost of producing
cheese in the United States is
LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
0.25 gallon of wine.
The table below shows the number of labor hours required to produce one gallon of wine
and one pound of cheese in the United States and France. The United States has an absolute
advantage in the production of
LH to Make -> USA -> France
1G of Wine -> 4.00 -> 1.00
1lb Cheese -> 1.00 -> 2.00
Only cheese.
Consider a two-country, two-commodity model. The table below shows the units of Good X
and Good Y produced in Country A and Country B per labor hour. If Country B transfers one
, labor hour from the production of Good X to the production of Good Y, total world
production of Good Y will _____ by _____ unit(s).
Productivity -> Country A -> Country B
Good X -> 1.00 -> 0.50
Good Y -> 0.20 -> 0.70
increase; 0.7
Vineland and Moonited Republic produce wine and cheese. The opportunity cost for the
production of a bottle of wine in Vineland is two pounds of cheese, and in the Moonited
Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that
Vineland has a comparative advantage in the production of wine.
Labor productivity refers to:
the number of units of output a worker can produce in one hour.
When Adam Smith presented his theory of absolute advantage, he assumed that all "value"
in an economy was determined by and measured in terms of the _____ used in the
production of the various goods.
labor hours
If Country X has higher labor productivity in the production of umbrellas than the rest of the
world, we would say that Country X has a(n) _____ in the production of umbrellas.
absolute advantage
