a.
when they are more self-sufficient than others
b.
when they can produce at the highest opportunity cost
c.
when they can produce at the lowest opportunity cost
d.
when they are less self-sufficient than others
ANSWER:
c
228. Which term refers to the ability to produce at a lower opportunity cost than someone else?
a.
competitive disadvantage
b.
absolute advantage
c.
absolute superiority
d.
comparative advantage
ANSWER:
d
229. What occurs when a person possesses a comparative advantage in the production of one good or service?
a.
It promotes greater self-sufficiency.
b.
It permits gains from trade to be realized due to a more efficient use of resources.
c.
It discourages specialization.
d.
The person's opportunity cost becomes higher than for that of other goods.
ANSWER:
b
230. Under what condition does a nation have a comparative advantage over another nation in the production of cars?
a.
when it can produce cars with more resources than the other country
b.
when it can produce cars at a lower opportunity cost than the other country
c.
when it can produce cars with fewer resources than the other country
d.
when it can produce cars at a higher opportunity cost than the other country
ANSWER:
b
231. Venezuela has a comparative advantage in oil production and Japan has a comparative advantage in electronics. Which statement does NOT accurately describe specialization and trade?
a.
These two countries should trade because it will free up time in both countries.
b.
These two countries should trade because it will free up resources in both countries.
c.
These two countries should trade since prices would be higher and each can make higher revenues.
d.
The two countries should trade and the workers in each country will become more skilled due to repetition.
ANSWER:
c
232. Which of the following statements about specialization is the most accurate?
a.
It leads to greater self-sufficiency.
b.
It allows workers to develop skills by working on a large number of tasks.
c.
It is always the result of an inefficient use of resources.
d.
It can lead to an increase in overall production.
ANSWER:
d
233. If Switzerland can produce chocolate at a lower relative cost than Belgium, what kind of advantage does Switzerland have?
a.
an absolute advantage
b.
a resource advantage
c.
a production advantage
d.
a comparative advantage
ANSWER:
d
234. Which of the following is NOT a question that scarcity forces all societies to answer?
a.
How are goods and services to be produced?
b.
Who will get the goods and services produced?
c.
How can scarcity be eliminated?
d.
Which goods and services are to be produced?
ANSWER:
c
235. Three economic questions must be determined in all societies. What are they?
a.
What goods will be produced? How will goods be produced? For whom will goods be produced?
b.
What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced?
c.
What will the price of each good be? Who will produce each good? Who will consume each good?
d.
How much will be produced? When will it be produced? How much will it cost?
ANSWER:
a
236. Which of society’s questions does a market system answer?