Trade creates value because:
a.
people get what they want.
b.
raw materials are transformed into finished products.
c.
people exchange things they do not want for things they do.
d.
idle resources are put to use. correct answers C
The reason Martha Stewart does not iron h...
Econ 231 Exam 1 || with 100% Verified Solutions.
Trade creates value because:
a.
people get what they want.
b.
raw materials are transformed into finished products.
c.
people exchange things they do not want for things they do.
d.
idle resources are put to use. correct answers C
The reason Martha Stewart does not iron her own clothes is that:
a.
she has never learned how to iron.
b.
she has a comparative advantage in ironing.
c.
she does not have an absolute advantage in ironing.
d.
her opportunity cost of ironing exceeds the person's wages providing the ironing service. correct
answers D
The real cost of producing a good is:
a.
the dollar cost of inputs used to make the item.
b.
the opportunity cost of producing the good.
c.
the resources that were used to make the good.
d.
the dollar amount it costs to sell the good. correct answers B
,In his prime, Michael Jordan played both professional basketball and professional baseball.
Compared with most people, Jordan would have an absolute advantage in:
a.
playing both basketball and baseball, since he was better at both than the average person.
b.
playing basketball only because he was relatively better at basketball.
c.
playing baseball only, since he ultimately gave up baseball to concentrate on basketball.
d.
neither basketball or baseball, since he cannot hold the relative advantage in both sports. correct
answers A
If the goal of education were solely to support economic growth, the ideal graduate would be a:
a.
jack-of-all-trades but master of none (where a "jack" is a serviceable tradesperson).
b.
jack-of-one-trade and master of one.
c.
jack-of-no-trades and master of none.
d.
jack-of-some-trades but master of none. correct answers B
Roses grown in Kenya travel to Amsterdam and ultimately to your local flower shop because:
a.
the World Rose Commission coordinates the different elements of the rose industry.
b.
markets coordinate the specialization and trade necessary for the flower industry to function.
c.
of the trade agreement between the governments of Kenya and Amsterdam.
d.
customers are willing to pay more for roses that pass through Amsterdam. correct answers B
Adam Smith advocated the benefits of:
a.
, protectionism.
b.
trade tariffs over trade quotas.
c.
international trade.
d.
absolute advantage correct answers C
The most important tools in economics, according to the textbook, are supply, demand, and the:
a.
idea of equilibrium.
b.
opportunity to barter.
c.
quantity of sales.
d.
level of prices correct answers A
If, for any given amount of a good or service, willingness to pay increases, then:
a.
supply has increased.
b.
supply has decreased.
c.
demand has increased.
d.
demand has decreased. correct answers C
If the demand curve for a normal good shifts downward and to the left:
a.
willingness to pay has increased.
b.
the population has increased.
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