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MULTIPLE-CHOICE QUESTIONS 1)You can either spend your summer working for $10,800 or go in a European vacation

Economics

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MULTIPLE-CHOICE QUESTIONS

1)You can either spend your summer working for $10,800 or go in a European vacation.  If you work, your expenses will be about $1,500.  If you go to Europe, the airfare, hotel, food and miscellaneous expenses will total about $10,000.  What’s your opportunity cost of visiting Europe?

a.	$19,300
b.	$20,800
c.	$12,300
d.	$8,500
e.	$22,300

 

       

     2.   Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour. Which of the following statements is correct?

a.	Don has an absolute advantage over Bob in the production of pencils and Bob in the production of pens
b.	Bob has an absolute advantage over Don in the production of pencils
c.	Bob has a comparative advantage over Don in the production of pens
d.	Don has a comparative advantage over Bob in the production of pens
e.	Don does not have a comparative advantage in the production of either good

 

 

     3.   If Helen gives up the opportunity to bake 40 cakes for each room she paints and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?

a.	The opportunity cost of painting is higher for Helen.
b.	The opportunity cost of baking cakes is lower for Josh.
c.	The opportunity cost of painting one room is 1/40 of a cake for Helen.
d.	The opportunity cost of baking one cake is 60 rooms painted for Josh.
e.	The opportunity cost of cakes cannot be computed.

 

 

 

     4.   If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then

a.	Sarah has a comparative advantage in shoemaking
b.	Daniel has a comparative advantage in shoemaking
c.	Sarah has an absolute and a comparative advantage in shoemaking
d.	Daniel has an absolute and a comparative advantage in shoemaking
e.	Sarah has an absolute advantage in shoemaking

 

 

Exhibit 2-1

 

	Hans	Maria
Loads of laundry per hour	4	12
Pages typed per hour	6	8

 

     5.   According to Exhibit 2-1, Hans' opportunity cost of doing a load of laundry is

a.	12 papers
b.	8 papers
c.	1 1/2 pages
d.	2/3 of a page
e.	impossible to compute

 

 

     6.   In one week, Mohammed can knit 5 sweaters or bake 240 cookies. The opportunity cost per sweater for Mohammed is

a.	$240
b.	240 cookies
c.	48 sweaters
d.	1/48 of a cookie
e.	48 cookies

 

       

Exhibit 2-3

 

 

 

 

     7.   In Exhibit 2-3, if all the economy's resources are used efficiently to produce good B, then the economy is at point

a.	g
b.	b
c.	h
d.	i
e.	e

 

 

     8.   Which of the following points in Exhibit 2-3 is unattainable, given the quantity of resources and level of technology?

a.	h
b.	g
c.	f
d.	i
e.	e

 

          

     9.   Which of the following points in Exhibit 2-3 represents an inefficient use of the economy's resources?

a.	g
b.	i
c.	f
d.	d
e.	h

 

 

   10.   In Exhibit 2-3, if resources are used fully and efficiently, then the economy can produce at point(s)

a.	f
b.	h, d, or e
c.	a, b, or c
d.	d or e
e.	g, h, or i

 

       

 

 

 

 

 

 

Exhibit 2-4

 

 

 

 

   11.   In Exhibit 2-4, what is the opportunity cost of moving from point c to point b?

a.	3 units of food
b.	22 units of education
c.	1 unit of food
d.	12 units of education
e.	62 units of education

 

 

Exhibit 2-5

 

 

 

 

   12.   In Exhibit 2-5, the opportunity cost of moving from point b to d is

a.	30 mufflers
b.	50 mufflers
c.	100 socks
d.	150 socks
e.	250 socks