ECON 1002 MICROECONOMICS EXAM 2
PRACTICE SOLUTION 2026 TESTED
QUESTIONS WITH FULL ANSWERS
◉ If instead of specialized doctors (neurologists, cardiologists,
gastroenterologists, etc.) we had doctors who each knew the same
thing about all aspects of medicine it would be:. Answer: Worse
because total medical knowledge in society would decrease.
◉ As trade becomes more widespread, specialization ____, in which
turn ____ productivity.. Answer: increases ; inceeases
◉ The ability of one producer to produce one good or service using
fewer inputs than another producer is:. Answer: Absolute advantage
◉ A produced has a comparative advantage over the producers if his
production of the good involves. Answer: A lower opportunity cost
◉ According to the theory of comparative advantage, a country
should specialize in producing a good that involves. Answer: A lower
opportunity cost than that of other countries.
,◉ The real cost of producing a good is:. Answer: The opportunity
cost of producing the good
◉ Figure: PFF Goods X & Y) Refer to the figure. Which of the points
representing various consumption possibilities for the country
portrayed above is only attainable through foreign trade?. Answer:
Point C
◉ (Figure: PFF Nickel & Textiles) Refer to the figure. What is the
maximum amount of textiles China can produce?. Answer: 8 tons
◉ (Figure: PFF Nickel & Textiles) Refer to the figure. How many tons
of text tiles does Australia give up to produce one ton of nickel.
Answer: 1/3
◉ (Table: Iphone and Ipod Production) According to the table on
iPhone and iPod Production, which of the following is TRUE?.
Answer: The United States has an absolute advantage in producing
both Iphones and Ipods.
◉ (Table: Iphone and Ipod Production) According to the table on
iPhone and iPod Production, the opportunity cost of production one
iPhone is:. Answer: 3/4 of one iPod for Canada, and one iPod for the
United States.
, ◉ (Table: iPhone and iPod Production) According to the table on
iPhone and iPod Production, which of the following is TRUE about
Canadian and U.S. comparative advantages?. Answer: Canada has a
comparative advantage in producing iPhones, and the United States
has a comparative advantage in producing iPods.
◉ (A) Anita is a wonderful baker and can bake 10 cakes in a day, but
then has no time left to make cookies. If she bakes only cookies, she
can make 200 cookies in a day. John can make equally delicious
cakes and cookies but can only make seven cakes or 100 cookies in a
day. Based on this information, which of the following statements is
true?. Answer: John has the comparative advantage in the
production of cakes.
◉ (B) Anita is a wonderful baker and can bake 10 cakes in a day, but
then has no time left to make cookies. If she bakes only cookies, she
can make 200 cookies in a day. John can make equally delicious
cakes and cookies but can only make seven cakes or 100 cookies in a
day. Based on this information, which of the following statements is
true?. Answer: Anita should bake cookies and John should bake
cakes.
◉ (Table: Production Possibilities for the United States and Mexico)
According to the table on Production Possibilities for the United
States and Mexico, Mexico has an absolute advantage in ________ and
a comparative advantage in _________.. Answer: Neither good, corn
PRACTICE SOLUTION 2026 TESTED
QUESTIONS WITH FULL ANSWERS
◉ If instead of specialized doctors (neurologists, cardiologists,
gastroenterologists, etc.) we had doctors who each knew the same
thing about all aspects of medicine it would be:. Answer: Worse
because total medical knowledge in society would decrease.
◉ As trade becomes more widespread, specialization ____, in which
turn ____ productivity.. Answer: increases ; inceeases
◉ The ability of one producer to produce one good or service using
fewer inputs than another producer is:. Answer: Absolute advantage
◉ A produced has a comparative advantage over the producers if his
production of the good involves. Answer: A lower opportunity cost
◉ According to the theory of comparative advantage, a country
should specialize in producing a good that involves. Answer: A lower
opportunity cost than that of other countries.
,◉ The real cost of producing a good is:. Answer: The opportunity
cost of producing the good
◉ Figure: PFF Goods X & Y) Refer to the figure. Which of the points
representing various consumption possibilities for the country
portrayed above is only attainable through foreign trade?. Answer:
Point C
◉ (Figure: PFF Nickel & Textiles) Refer to the figure. What is the
maximum amount of textiles China can produce?. Answer: 8 tons
◉ (Figure: PFF Nickel & Textiles) Refer to the figure. How many tons
of text tiles does Australia give up to produce one ton of nickel.
Answer: 1/3
◉ (Table: Iphone and Ipod Production) According to the table on
iPhone and iPod Production, which of the following is TRUE?.
Answer: The United States has an absolute advantage in producing
both Iphones and Ipods.
◉ (Table: Iphone and Ipod Production) According to the table on
iPhone and iPod Production, the opportunity cost of production one
iPhone is:. Answer: 3/4 of one iPod for Canada, and one iPod for the
United States.
, ◉ (Table: iPhone and iPod Production) According to the table on
iPhone and iPod Production, which of the following is TRUE about
Canadian and U.S. comparative advantages?. Answer: Canada has a
comparative advantage in producing iPhones, and the United States
has a comparative advantage in producing iPods.
◉ (A) Anita is a wonderful baker and can bake 10 cakes in a day, but
then has no time left to make cookies. If she bakes only cookies, she
can make 200 cookies in a day. John can make equally delicious
cakes and cookies but can only make seven cakes or 100 cookies in a
day. Based on this information, which of the following statements is
true?. Answer: John has the comparative advantage in the
production of cakes.
◉ (B) Anita is a wonderful baker and can bake 10 cakes in a day, but
then has no time left to make cookies. If she bakes only cookies, she
can make 200 cookies in a day. John can make equally delicious
cakes and cookies but can only make seven cakes or 100 cookies in a
day. Based on this information, which of the following statements is
true?. Answer: Anita should bake cookies and John should bake
cakes.
◉ (Table: Production Possibilities for the United States and Mexico)
According to the table on Production Possibilities for the United
States and Mexico, Mexico has an absolute advantage in ________ and
a comparative advantage in _________.. Answer: Neither good, corn
