University of Illinois, Urbana Champaign - ECON 102  ECON 102 CA1/CA2 FA17 — Production and Trade = Quiz 2: Production and Trade Started on Saturday, September 2, 2017, 10:13 AM State Finished Completed on Saturday, September 2, 2017, 10:21 AM Time taken 7 mins 53 secs Question 1 Economists will call the following an inefficient allocation Correct of resources: Information for TAs: see general feedback for creating new versions

ECON 102 CA1/CA2 FA17 — Production and Trade =

Quiz 2: Production and Trade

Started on Saturday, September 2, 2017, 10:13 AM

State Finished

Completed on Saturday, September 2, 2017, 10:21 AM

Time taken 7 mins 53 secs

Question 1 Economists will call the following an inefficient allocation

Correct of resources:

1.00 points out

of 1.00

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versions.

Select one:

high level of unemployment

None of these situations is inefficient

All of these situations are inefficient

many people waiting to vote

a long line at the airport security checkpoint

Your answer Is correct.

The correct answer is: high level of unemployment

Question 2 Four survivors are stuck on an island. Each can either fish or gather

Correct berries. The following table shows what each survivor can produce in a

day

1.00 points out

of 1.00

pf tm [me | ae |

Fish 4 3 2 1

(Ibs)

Berries 1 2 3 4

(Ibs)

When the survivors produce 6 lbs of berries at the smallest possible cost,

the opportunity cost for one pound of berries is pounds of fish.

Select one:

1/4

1.5

4

2/3

Your answer is correct.

The correct answers are: 2/3, 1.5

Question 3 In one hour, the United States can produce 25 tons of

Correct steel or 250 automobiles. In one hour, Japan can produce

1,00 points out 30 tons of steel or 275 automobiles. This information

of 1.00 implies that:

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versions.

Select one:

the United States has a comparative advantage in the production of

steel.

Japan has a comparative advantage in the production of

automobiles.

Japan has a comparative advantage in the production of steel.

Japan has a comparative advantage in the production of both goods.

Your answer Is correct.

The correct answer Is: Japan has a comparative advantage in the

production of steel.

Question 4 If a country's PPF moves from A to C, which of the

Correct following is happening?

1.00 points out

of 1.00

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versions.

Select one:

Improved efficiency in producing good Y

Improved efficiency in producing good X

Production possibility is shrinking

We cannot tell from the choices given

Your answer Is correct.

The correct answer is: Improved efficiency in producing good X

Question 5 Suppose an economy where resources are fully employed. As the economy

Correct increases production of “restaurant meals” , the opportunity cost of

producing more restaurant meals because

1.00 points out

of 1.00 Select one:

Increases, because the economy produces restaurant meals less

efficiently

Decreases, because the economy produces restaurant meals more

efficiently

Increases, because the economy produces the additional restaurant

meals with resources better suited to producing other goods

Decreases, because the economy produces additional restaurant

meals with resources better suited to producing other goods

Your answer Is correct.

The correct answer Is: Increases, because the economy produces the

additional restaurant meals with resources better suited to producing other

goods

Question 6 The table below show the production possibilities for two

Correct countries: Greece and Germany. If these two countries

1.00 points out traded based on comparative advantage then the

of 1.00 following would be a trade beneficial to both regions:

Sweaters Skirts

Germany 1 5

Greece 2 8

Select one:

60 skirts for 10 sweaters

36 skirts for 12 sweaters

21 skirts for 6 sweaters

18 skirts for 4 sweaters

The correct answer is: 18 skirts for 4 sweaters

Question 7 The following table shows the hours needed to produce 1 car, and the

Correct hours needed to produce 1 bike for UK and Germany. What is the

opportunity cost of producing 1 car for UK (without trade)

1.00 points out

of 1.00

Cars Bikes

UK 20hs Shs

Germany 16hs 2hs

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Select one:

4 bikes

8 bikes

4 cars.

1/4 bikes.

None of the other choices is correct

Your answer Is correct.

The correct answer is: 4 bikes

Question 8 An economy Is said to have a comparative advantage in the production of

Correct one good if it:

1.00 points out Select one:

of 1.00

a. has the highest opportunity cost for producing a particular good.

b. can produce less of all goods than another economy.

c. has the lowest opportunity cost for producing a particular good.

d. can produce more of all goods than another economy.

The correct answer is: has the lowest opportunity cost for producing a

particular good.

Question 9 [Q#k2001] A production possibility frontier illustrates the in an

Correct economy that produces only goods.

1.00 points out Select one:

of 1.00

a. prices; two

b. shortages; three

c. trade-offs; one

d. trade-offs; two

The correct answer Is: trade-offs; two

Question 10 If they spend all night writing computer programs, Laurence can write 10

Correct programs while Carrie Anne can write 5. If they spend all night making

sunglasses, Laurence can make 6 while Carrie Anne can make 4. Given this

1.00 points out information and supposing Laurence and Carrie Anne have constant

of 1.00 opportunity costs, we know that:

Select one:

a. Carrie Anne has an absolute advantage in both programs and

sunglasses.

b. Laurence has an absolute advantage in both programs and

sunglasses.

c. Carrie Anne has an absolute advantage in programs but not in

sunglasses.

d. Laurence has an absolute advantage in programs but not in

sunglasses.

The correct answer is: Laurence has an absolute advantage in both

programs and sunglasses.