ECON 3107 Multiple choice questions

Q1. Consider the following table.
Country A Country B Bananas 4 5 Apples 2 10 Numbers denote hours to produce 1 unit
Country __________ has a comparative
advantage at _________________
because there the price of bananas
relative to the price of apples is
_________________, while in Country
_________________ is ________________
A) A; bananas; 2; B; 2
B) A; apples; 2; B; 1/2
C) B; apples; 2; A; 1/2
D) B; bananas; 1/2; A; ½
Q2. Consider the following table.
Country A
Country B
Bananas
4
5
Apples
2
10
Numbers denote hours to produce 1 unit
Country A has an absolute ___________
at __________ and an
absolute ______________ at _____________,
a comparative ____________ at ________________
and a comparartive ________________ at ______________
A) advantage; bananas;
advantage; apples;
advantage; apples;
disadvantage; bananas
B) disadvantage; bananas;
disadvantage; apples; advantage; apples;
disadvantage; bananas
C) advantage; bananas;
advantage; apples;
advantage; apples;
advantage; bananas
D) advantage; bananas;
disadvantage; apples;
advantage; apples;
disadvantage; bananas
Q3. Consider the following table.
Country A
Country B
Bananas
4
5
Apples
2
10
If Countries specialize according to comparative advantage, the terms of trade
(TOT), that is the price of apples relative to bananas,
after opening up to trade will be.... A) between 0 and 1/2
B) not enough information
C) between 2 and 4
D) between 1/2 and 2
Q4. Consider the following table.
Country A
Country B
Bananas
4
5
Apples
2
10
Numbers denote hours to produce 1 unit
Suppose that Country A and B's
maximum production
of bananas is 1000. The amount of hours of work available in A is
_____________________
A) 4000 B) not enough information
C) 1000
D) 250
Q5. Q6. . Q7. Q8. Consider the following table.
Country A
Country B
Bananas
4
5
Apples
2
10
Numbers denote hours to produce 1 unit
The world per unit gains of specializing according to
Comparative advantage are...
A) 1 apple; 2 bananas
B) 1 apple; 1 banana
C) 2 apples; 2 bananas
D) 2 apples; 1 banana Q9. Consider the following table.
Country A
Country B
Bananas
1
5
Apples
2
3
Numbers denote hours to produce 1 unit
The price of Apples in Country A is...
A) (Wage in A)*1
B) $2
C) (Wage in A)*2
D) $1
Q10. Absolute advantage is...
A) The ability of a Country to produce
a good using fewer productive inputs than is possible
anywhere else in the world
B) The ability of a Country to produce
a good using more productive inputs than is possible
anywhere else in the world
C) The ability of a Country to produce
a good independenty of how much
productive inputs to employ in producton
D) The same
as comparative advantage
Q11. Consider the following table.
Country A
Country B
Bananas
1
5
Apples
4
2
Numbers denote hours to produce 1 unit
What is the per unit gain for banana if Country A and B specialize according to their
absolute advantage? A) 1 extra banana
B) not enough information
C) 4 extra bananas
D) 3 extra bananas
Q12.