ECON 2100 - Mock Test #2 with
complete verified solutions
Moving between two points on the PPF, a country gains 8 desktop computers
and forgoes 4 laptop computers. The opportunity cost of 1 desktop computer
is
a) 1 desktop
b) 8 desktops
c) 2 laptops
d) 1/2 of a laptop - answer d
When Mik has an absolute advantage in the production of two goods over
Tommy, Mik
a) is less productive than Tommy
b) is better off if he does not engage in specialization and
trade with Tommy
c) is more productive in producing both goods than
Tommy
d) cannot gain from trade with Tommy - answer c
Which of the following is an assumption used when drawing a production
possibilities frontier?
i. Human wants and desires are limited to what is available.
ii. Only two goods are considered.
iii. The level of technology is fixed and unchanging.
a) i only
b) i and ii
, c) ii only
d) ii and iii - answer d
Economic growth depends upon
i. Increasing the quantity of labor.
ii. Lowering the prices of goods and services.
iii. Advancing technology
a) i, ii, and iii
b) i only
c) ii and iii
d) i and iii - answer d
A country has a comparative advantage in the production of a good if it can
a) produce more of a good than another country
b) produce more of a good most efficiently
c) produce the good at the lowest opportunity cost
d) tradeoff producing the good for another good - answer c
The price of cotton clothing falls. As a result
a) the quantity demanded of cotton clothing decreases
b) the quantity demanded of cotton clothing increases
c) the demand for cotton clothing decreases
d) the demand for cotton clothing increases - answer b
Market Equilibrium
i. can never occur because there are always people who want a good but
cannot afford it
complete verified solutions
Moving between two points on the PPF, a country gains 8 desktop computers
and forgoes 4 laptop computers. The opportunity cost of 1 desktop computer
is
a) 1 desktop
b) 8 desktops
c) 2 laptops
d) 1/2 of a laptop - answer d
When Mik has an absolute advantage in the production of two goods over
Tommy, Mik
a) is less productive than Tommy
b) is better off if he does not engage in specialization and
trade with Tommy
c) is more productive in producing both goods than
Tommy
d) cannot gain from trade with Tommy - answer c
Which of the following is an assumption used when drawing a production
possibilities frontier?
i. Human wants and desires are limited to what is available.
ii. Only two goods are considered.
iii. The level of technology is fixed and unchanging.
a) i only
b) i and ii
, c) ii only
d) ii and iii - answer d
Economic growth depends upon
i. Increasing the quantity of labor.
ii. Lowering the prices of goods and services.
iii. Advancing technology
a) i, ii, and iii
b) i only
c) ii and iii
d) i and iii - answer d
A country has a comparative advantage in the production of a good if it can
a) produce more of a good than another country
b) produce more of a good most efficiently
c) produce the good at the lowest opportunity cost
d) tradeoff producing the good for another good - answer c
The price of cotton clothing falls. As a result
a) the quantity demanded of cotton clothing decreases
b) the quantity demanded of cotton clothing increases
c) the demand for cotton clothing decreases
d) the demand for cotton clothing increases - answer b
Market Equilibrium
i. can never occur because there are always people who want a good but
cannot afford it
