Quiz for Ch. 2 Production Possibility Curves and Comparative Advantage PDF

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Professor Jay Patyk...

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Quiz for Ch. 2 - Produc!on Possibility Curves and Compara!ve Advantage Due Apr 19 at 10pm Points 5 Questions 5 Available Apr 9 at 1am - Apr 19 at 10pm 11 days Time Limit None

Instruc!ons This quiz pertains to the material presented in Ch. 2 on Production Possibility Curves and Comparative Advantage. For each question, please select what you believe is the most correct solution by simply clicking on the empty circle adjacent to that particular solution. Once you have done that, and you are ready to submit the quiz for grading, simply click on the button "Submit Quiz" down at the bottom of the page. Results will be released once the due date for the assignment has passed. Please be sure to review the results at your convenience.

A!empt History LATEST

Attempt

Time

Score

Attempt 1

10 minutes

4 out of 5

! Correct answers will be available on Apr 19 at 10:05pm. Score for this quiz: 4 out of 5 Submitted Apr 19 at 5:39pm This attempt took 10 minutes.

Question 1

1 / 1 pts

The economy that operates above (outside of) its production possibility curve is less efficient than it would be if it were operating on its production possibility curve.

False

Feedback False. The PPC represents the greatest amount of output/production an economy can produce given the current level of resources, technology, etc. Operating above/outside the PPC represents unattainable levels of output/production given the current resources, technology, etc., available. It is therefore no less efficient than being on the current PPC. It is simply unattainable. However, for this statement to be true, we must be inside the PPC, not outside it.

Question 2

1 / 1 pts

When individuals trade, their combined PPC typically becomes bowed out, thus reflecting the fact that through trade, more of both goods can be produced, and thus consumed.

True

True. Through trade, individuals will be able to produce and consume more of both goods via specialization and exploiting comparative advantages. Thus, the PPC becomes more bowed out, reflecting the greater amount of goods produced, and thus consumed.

Incorrect

0 / 1 pts

Question 3

Consider the table below, where each production choice represents a point on a production possibility curve. This production possibility table shows that the opportunity cost of an additional 20 units of rye is: Eggs

Rye

10

0

8

10

6

20

4

30

2

40

0

50

Correct Answer

decreasing as more rye is produced.

Feedback Graph each point and find out that the PPC here is a straight line, reflecting a constant trade off between eggs and rye. As such, there is a constant opportunity cost, where the trade off of units of rye and eggs stays the same (20 units of rye for 4 eggs).

Question 4

1 / 1 pts

Suppose a country has a comparative advantage in the production of bananas and a comparative disadvantage in the production of pears. In this case, which of the following production patterns will produce the greatest benefits from trade for this country?

160 pounds of bananas and 40 pounds of pears.

Feedback A country that wants to take advantage of trade will increase production of the goods for which it has a comparative advantage, and reduce production of the goods for which it has a comparative disadvantage. In this scenario, this country would want to maxmimize its production of bananas and minimize its production of pears. Therefore, the combination of 160 pounds of bananas and 40 pounds of pears is the most ideal combination that will generate the greatest benefits.

Question 5

1 / 1 pts

Suppose that in Russia, one unit of labor can produce either 2 tons of wheat or 4 tons of soy beans, while in Poland, one unit of labor can produce either 4 tons of wheat of 2 tons of soy beans. Given this information, which of the following statements is most true?

Poland has a comparative advantage in producing wheat but not soy beans.

Feedback Russia must give up 2 tons of soy beans to increase wheat production by 1 ton, while Poland only has to give up 1 ton of soy beans. Therefore, Poland has a comparative advantage in producing wheat.

Quiz Score: 4 out of 5...