Econ 252 - Exam 1 Questions with Correct Answers (Grade A+)
Question 1: Erin has a choice between two activities: She can repair one transmission per hour or she
can repair two fuel injectors per hour. The opportunity cost of repairing one transmission is:
Answer: 2 fuel injectors
Question 2: Katie works at a customer service center and every hour she has a choice between two
activities: answering 200 telephone calls per hour or responding to 400 emails per hour. The
opportunity cost of responding to 400 phone calls is:
Answer: 800 emails
Question 3: Deirdre has a choice between writing one more book this year or five more articles this
year. The opportunity cost of writing half of a book this year, in terms of articles is:
Answer: 2.5 articles
Question 4: American workers are typically paid much more than Chinese workers. This is largely
because American workers are typically more productive than Chinese workers.
Answer: True
Question 5: Julia Child, an American chef (and World War II spy) who reintroduced French cooking
to Americans in the 1960s, was paid much more than most American chefs. This was largely because
Julia Child was much more productive than most American chefs.
Answer: True
Question 6: Fit the following example into one of the reasons for trade. Two recently abandoned cats,
Bingo and Tuppy, need to quickly learn how to catch mice in order to survive. If they also remain well
groomed, they stand a better chance of surviving: Good grooming reduces the risk of disease and
parasites. Each cat could go it alone, focusing almost exclusively on learning to catch mice. The
alternative would be for Bingo to specialize in learning how to groom well and for Tuppy to specialize
in learning how to catch mice well. Division of knowledge Comparative advantage
Answer: Division of knowledge
Question 7: Fit the following example into one of the reasons for trade. Former President Bill Clinton, a
graduate of Yale Law School, hires attorneys who are less skilled than himself to do routine legal work.
Division of knowledge Comparative advantage
Answer: Comparative advantage
Page 1
, Question 8: In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes,
Mitchell can make miso soup; it takes Mitchell an hour to clean the kitchen. Kana has an absolute
advantage at both. Mitchell has an absolute advantage at both. Kana has an absolute advantage at miso
soup and Mitchell has an absolute advantage at cleaning. Mitchell has an absolute advantage at miso
soup and Kana has an absolute advantage at cleaning.
Answer: Mitchell has an absolute advantage at miso soup and Kana has an absolute advantage at cleaning.
Question 9: In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes,
Mitchell can make miso soup; it takes Mitchell an hour to clean the kitchen. Kana has a comparative
advantage at both. Mitchell has a comparative advantage at both. Kana has a comparative advantage
at miso soup and Mitchell has a comparative advantage at cleaning. Mitchell has a comparative
advantage at miso soup and Kana has a comparative advantage at cleaning.
Answer: Mitchell has a comparative advantage at miso soup and Kana has a comparative advantage at
cleaning.
Question 10: In one hour, Ethan can bake 20 cookies or lay the drywall for two rooms. In one hour,
Sienna can bake 100 cookies or lay the drywall for three rooms. Ethan has an absolute advantage at
both. Sienna has an absolute advantage at both. Ethan has an absolute advantage at baking cookies and
Sienna has an absolute advantage at laying drywall. Sienna has an absolute advantage at baking
cookies and Ethan has an absolute advantage at laying drywall.
Answer: Sienna has an absolute advantage at both.
Question 11: In one hour, Ethan can bake 20 cookies or lay the drywall for two rooms. In one hour,
Sienna can bake 100 cookies or lay the drywall for three rooms. Ethan has a comparative advantage at
both. Sienna has a comparative advantage at both. Ethan has a comparative advantage at baking
cookies and Sienna has a comparative advantage at laying drywall. Sienna has a comparative
advantage at baking cookies and Ethan has a comparative advantage at laying drywall.
Answer: Sienna has a comparative advantage at baking cookies and Ethan has a comparative advantage at
laying drywall.
Question 12: Kara can build two glass sculptures per day or she can design two full-page newspaper
advertisements per day. Sara can build one glass sculpture per day or design four full-page newspaper
ads per day. Kara has an absolute advantage at both. Sara has an absolute advantage at both. Kara has
an absolute advantage at glass sculptures and Sara has an absolute advantage at newspaper ads. Sara
has an absolute advantage at glass sculptures and Kara has an absolute advantage at newspaper ads.
Answer: Kara has an absolute advantage at glass sculptures and Sara has an absolute advantage at
newspaper ads.
Page 2
Question 1: Erin has a choice between two activities: She can repair one transmission per hour or she
can repair two fuel injectors per hour. The opportunity cost of repairing one transmission is:
Answer: 2 fuel injectors
Question 2: Katie works at a customer service center and every hour she has a choice between two
activities: answering 200 telephone calls per hour or responding to 400 emails per hour. The
opportunity cost of responding to 400 phone calls is:
Answer: 800 emails
Question 3: Deirdre has a choice between writing one more book this year or five more articles this
year. The opportunity cost of writing half of a book this year, in terms of articles is:
Answer: 2.5 articles
Question 4: American workers are typically paid much more than Chinese workers. This is largely
because American workers are typically more productive than Chinese workers.
Answer: True
Question 5: Julia Child, an American chef (and World War II spy) who reintroduced French cooking
to Americans in the 1960s, was paid much more than most American chefs. This was largely because
Julia Child was much more productive than most American chefs.
Answer: True
Question 6: Fit the following example into one of the reasons for trade. Two recently abandoned cats,
Bingo and Tuppy, need to quickly learn how to catch mice in order to survive. If they also remain well
groomed, they stand a better chance of surviving: Good grooming reduces the risk of disease and
parasites. Each cat could go it alone, focusing almost exclusively on learning to catch mice. The
alternative would be for Bingo to specialize in learning how to groom well and for Tuppy to specialize
in learning how to catch mice well. Division of knowledge Comparative advantage
Answer: Division of knowledge
Question 7: Fit the following example into one of the reasons for trade. Former President Bill Clinton, a
graduate of Yale Law School, hires attorneys who are less skilled than himself to do routine legal work.
Division of knowledge Comparative advantage
Answer: Comparative advantage
Page 1
, Question 8: In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes,
Mitchell can make miso soup; it takes Mitchell an hour to clean the kitchen. Kana has an absolute
advantage at both. Mitchell has an absolute advantage at both. Kana has an absolute advantage at miso
soup and Mitchell has an absolute advantage at cleaning. Mitchell has an absolute advantage at miso
soup and Kana has an absolute advantage at cleaning.
Answer: Mitchell has an absolute advantage at miso soup and Kana has an absolute advantage at cleaning.
Question 9: In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes,
Mitchell can make miso soup; it takes Mitchell an hour to clean the kitchen. Kana has a comparative
advantage at both. Mitchell has a comparative advantage at both. Kana has a comparative advantage
at miso soup and Mitchell has a comparative advantage at cleaning. Mitchell has a comparative
advantage at miso soup and Kana has a comparative advantage at cleaning.
Answer: Mitchell has a comparative advantage at miso soup and Kana has a comparative advantage at
cleaning.
Question 10: In one hour, Ethan can bake 20 cookies or lay the drywall for two rooms. In one hour,
Sienna can bake 100 cookies or lay the drywall for three rooms. Ethan has an absolute advantage at
both. Sienna has an absolute advantage at both. Ethan has an absolute advantage at baking cookies and
Sienna has an absolute advantage at laying drywall. Sienna has an absolute advantage at baking
cookies and Ethan has an absolute advantage at laying drywall.
Answer: Sienna has an absolute advantage at both.
Question 11: In one hour, Ethan can bake 20 cookies or lay the drywall for two rooms. In one hour,
Sienna can bake 100 cookies or lay the drywall for three rooms. Ethan has a comparative advantage at
both. Sienna has a comparative advantage at both. Ethan has a comparative advantage at baking
cookies and Sienna has a comparative advantage at laying drywall. Sienna has a comparative
advantage at baking cookies and Ethan has a comparative advantage at laying drywall.
Answer: Sienna has a comparative advantage at baking cookies and Ethan has a comparative advantage at
laying drywall.
Question 12: Kara can build two glass sculptures per day or she can design two full-page newspaper
advertisements per day. Sara can build one glass sculpture per day or design four full-page newspaper
ads per day. Kara has an absolute advantage at both. Sara has an absolute advantage at both. Kara has
an absolute advantage at glass sculptures and Sara has an absolute advantage at newspaper ads. Sara
has an absolute advantage at glass sculptures and Kara has an absolute advantage at newspaper ads.
Answer: Kara has an absolute advantage at glass sculptures and Sara has an absolute advantage at
newspaper ads.
Page 2
