Homework answers / question archive / University of Illinois, Urbana Champaign - ECON 102  ECON 102 CA1/CA2 FA17 P Production and Trade ® HSQ 1 Started on Wednesday, October 18, 2017, 5:05 PM State Finished Completed on Wednesday, October 18, 2017, 5:25 PM Time taken 19 mins 57 secs Question 1 You have $2 to spend on a drink from the vending machine

University of Illinois, Urbana Champaign - ECON 102  ECON 102 CA1/CA2 FA17 P Production and Trade ® HSQ 1 Started on Wednesday, October 18, 2017, 5:05 PM State Finished Completed on Wednesday, October 18, 2017, 5:25 PM Time taken 19 mins 57 secs Question 1 You have $2 to spend on a drink from the vending machine

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University of Illinois, Urbana Champaign - ECON 102

 ECON 102 CA1/CA2 FA17 P Production and Trade ® HSQ 1

Started on Wednesday, October 18, 2017, 5:05 PM

State Finished

Completed on Wednesday, October 18, 2017, 5:25 PM

Time taken 19 mins 57 secs

Question 1 You have $2 to spend on a drink from the vending machine. A bottle of water costs $2 and

the bottle of orange juice will also cost you $2. If you chose the bottle of water, the

opportunity cost of buying the bottle of water is:

Select one:

a. the enjoyment you would have received from the bottle of orange juice.

 

b. nothing.

c. $2 plus the enjoyment you would have received from the bottle of orange juice.

d. $2.

Question 2 You won a free ticket to see an Eric Clapton concert (which has no resale value). Bob

Dylan is performing on the same night and is your most attractive alternative. Tickets to

+00 points out of see Dylan cost $100, but you are willing to pay up to $120 to see him. Assume there are

other costs to see either performer. Based on this information, what is the opportunity

cost of seeing Eric Clapton?

Select one:

$120

$0

$20

$100

Student calculates opportunity cost as the net value of an alternative

Question 3 For your last birthday, your parents gave you a used car for which they

Correct paid the fair market value of $10,000. While you are happy with the

1,00 points out of car, you were hoping for a sportier model that sells for $18,000. The

1.00 opportunity cost to you of keeping the car that your parents gave you

IS:

Select one:

$10,000 worth of other goods that you could get if you sold the car.

$18,000, because that is the car you gave up.

Zero, because the car was a gift.

$8,000, the surplus you lost when your parents did not give you your hoped-for car.

Question 4 Say you have two assignments due tomorrow: a MATH assignment, and an ECON

Correct assignment. If took an average of 13 minutes to answer an ECON problem, and 18

+00 points out of minutes to answer a MATH problem. If you had limited time left to study, and wanted to

Solve the most problems regardless of the class, your best strategy would be to solve:

Select one:

a. a combination of both ECON and MATH

b. only ECON problems

c. We need more information to answer

d. only MATH problems

 

Question 8 Say you have two assignments due tomorrow: a CHEM assignment,

Correct and an CS assignment. If took an average of 20 minutes to answer a

1.00 points out of CHEM problem, and 10 minutes to answer a CS problem. If you had

+00 limited time left to study, and wanted to solve the most problems

regardless of the class, your best strategy would be to solve:

Select one:

only CS problems

a combination of both CHEM and CS

We need more information to answer

only CHEM problems

Question 9 You won a free ticket to see an Madonna concert (which has no resale

Correct value). Eric Clapton is performing on the same night and is your most

1.00 points out of attractive alternative. Tickets to see Clapton cost $300, but you are

+00 willing to pay up to $500 to see him. Assume there are no other costs

to see either performer. Based on this information, what is the

opportunity cost of seeing Madonna?

Select one:

$0

$300

$500

$200

Question 10 Four survivors are stuck on an island. Each can either fish or gather berries. The

Incorrect following table shows what each survivor can produce in a day (survivors do not have to do

. only ONE thing; but can do combinations):

Fish 4 3 2 1

(lbs)

Berries 1 2 3 4

(lbs)

When the survivors produce 6 Ibs of fish at the smallest possible cost, the opportunity cost

for one pound of fish is pounds of berries.

Select one:

1/4 X&

2/3

4

1.5

Question 11 In one hour, the United States can produce 25 tons of steel or 250

Incorrect automobiles. In one hour, Japan can produce 30 tons of steel or 275

0.00 voi automobiles. This information implies that:

 

 

Select one:

the United States has a comparative disadvantage in the production of steel.

the United States has an absolute advantage in the production of steel.

Japan has a comparative disadvantage in the production of steel. X

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

 

Question 12

lf a country's PPF moves from A to C, which of the following is

Correct happening?

Select one:

Improved efficiency in producing good Y

We cannot tell from the choices given

Improved efficiency in producing good X

Production possibility is shrinking

 

Question 13 Suppose that you are registered in two classes: math and economics, which take up all of

Correct your time. If you decide to study longer hours for math, then the opportunity cost of one

. more hour of math cramming because ,

Select one:

Decreases, because you spend more time on math when resources better suited to

studying for econ

Increases, because you spend more time on math when resources better suited to

studying for econ

Decreases, because you study for math more efficiently

Increases, because you study for math less efficiently

Question 14

The table below show the production possibilities for two countries:

Correct Greece and Germany. If these two countries traded based on

+00 vo comparative advantage then the following would be a trade beneficial

 

Sweaters Skirts

Germany 1 5

Greece 2 8

Select one:

60 skirts for 10 sweaters

21 skirts for 4 sweaters

36 skirts for 12 sweaters

27 skirts for 6 sweaters

Question 15 The following table shows the hours needed to produce 1 car, and the hours needed to

Correct produce 1 bike for UK and Germany. What is the opportunity cost of producing 1 car for

Germany (without trade)

Cars Bikes

UK 20hs 5hs

Germany 16hs 2hs

Information for TAs: see general feedback for creating new versions.

Select one:

1/8 cars.

None of the other choices is correct

1/8 bikes.

4 bikes.

8 bikes.

Question 16 If an economy is producing at a point on its production possibilities frontier:

Correct

Select one:

1.00 points out of

1.00 a. it is efficient in allocation but not necessarily in production.

b. it is not necessarily efficient in production or allocation.

c. it is efficient in production and allocation.

d. it is efficient in production but not necessarily in allocation.

Question 17 If the opportunity cost of manufacturing automobiles is higher in the United States than in

Correct Britain and the opportunity cost of manufacturing airplanes is lower in the United States

than in Britain, then the United States will:

Select one:

a. import airplanes from Britain and export automobiles to Britain.

b. export airplanes to Britain and import automobiles from Britain.

c. import both airplanes and automobiles from Britain.

d. export both airplanes and automobiles to Britain.

Question 18 Assume that Colombia gives up three motorcycles for each ton of coffee it produces, while

Correct Bolivia gives up seven motorcycles for each ton of coffee it produces.

Select one:

 

a. Colombia has a comparative advantage in coffee production and should

specialize in the production of motorcycles.

b. Colombia has a comparative advantage in motorcycle production and should

specialize in motorcycle production.

c. Colombia has a comparative advantage in coffee production and should

specialize in coffee production.

d. Colombia has a comparative advantage in motorcycle production and should

specialize in coffee.

Question 19 Consider a production possibility frontier for lraq. If in 2014 Iraq's resources are not being

Correct fully utilized, Iraq willbe somewhere ___———__—sOff its production possibility frontier.

Select one:

 

a. near the top

b. outside

c. near the bottom

d. inside

Question 20 All points outside the production possibility frontier are:

Correct

 Select one:

a. economic growth.

b. efficient production points.

c. inefficient production points.

d. infeasible production points.

Question 21 Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake

Correct sale. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15

. brownies or 15 cookies. What is Mark's opportunity cost to produce one brownie?

Select one:

a. 1/2 brownie

b. 1 brownie

c. 1/2 cookie

d. 1 cookie

Question 22 In one hour, the United States can produce 200 tons of steel or 50

Correct automobiles. In one hour, Japan can produce 40 tons of steel or 80

+00 voi automobiles. This information implies that:

Select one:

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

Japan has an absolute advantage in the production of steel.

the United States has a comparative advantage in the production of automobiles.

Japan has a comparative advantage in the production of automobiles.

Question 23 The following table shows the hours needed to produce 1 car, and the hours needed to

Correct produce 1 bike for UK and Germany. What is the opportunity cost of producing 1 car for

UK (without trade)

Cars Bikes

UK 8hs 4hs

Germany 4hs 16hs

Select one:

2 bikes

None of the other choices is correct

0.5 bikes.

4 bikes.

0.25 bikes

Question 24 Between the three PPF curves shown below curve A represents:

Correct

|

Select one:

We need more information to answer the question

the most inefficient economy

the most inefficient economy AND also the one with the lowest production

possibilities

the economy where producing good X carries the most cost

the economy the lowest production possibilities

Question 25 The table below show the production possibilities for two countries:

Correct Greece and Germany. If these two countries traded based on

+00 vo comparative advantage then the following would be a trade beneficial

 

Sweaters Skirts

Germany 3 6

Greece 4 8

Select one:

21 skirts for 21 sweaters

35 skirts for 10 sweaters

8 skirts for 4 sweaters

6 skirts for 12 sweaters