ECN130 Chapter 8 Practice Exam
A prediction market is a market where - ANS-Payoffs are linked to whether an uncertain
event occurs
\As long as people have different ____ everyone has a comparative advantage in something
- ANS-Opportunity costs
\Chantelle grows tomatoes and sells them at the farmer's market. Because the price of
tomatoes rises, she is encouraged to grow and sell more. This is an example of price
functioning as - ANS-incentive
\Cornell can type reports faster and more accurately than Alice, so Cornell has a ________
in typing reports - ANS-Absolute advantage
\During the coronavirus pandemic, global supply chain issue caused the supply of new cars
to shift left. While role did price play in the new car market? Price was a - ANS-Message to
potential buyers that the marginal cost of manufacturing new cars is rising
\Economists generally believe that the person should specialize in the production of a good
or service if - ANS-They can produce the product while forgoing fewer alternative products
than any other person
\On camping trips Katie, is much faster than her husband, Brett, at putting up a tent and
starting a fire. Who should do each task if they want to maximize their time sitting around the
campfire - ANS-They should first each focus on that task in which they a comparative
advantage. When one finishes the assigned task, they can help the other
\Price is functioning as a message when it - ANS-is a line of communication between buyers
and sellers in a market
\The table provides data on how long it takes Joachim and Zane to clean the bathrooms and
wash the windows at a home. Who has the comparative advantage in washing windows?
Joachim clean the bathrooms 4
Zane clean the bathrooms 3
Joachim wash the windows 10
Zane wash the windows 6 - ANS-Zane, because he has a lower opportunity cost
\The table provides data on how long it takes Marla and Jason to cook lasagna and chicken
curry. Marla's opportunity cost of making lasagna is __________ and Jason's is ______
Marla lasagna 4
Jason lasagna 3
Marla chicken curry 3
Jason chicken curry 1 - ANS-0.75 of a chicken curry; 0.33 of a chicken curry
\When a country's production mix becomes more specialized due to increased international
trade based on comparative advantage - ANS-Some industries in the country will shrink and
possibly disappear
\When a manager uses comparative advantage to assign tasks in a work place, then each: -
ANS-Task is assigned to the worker with the lowest opportunity cost for performing the task
A prediction market is a market where - ANS-Payoffs are linked to whether an uncertain
event occurs
\As long as people have different ____ everyone has a comparative advantage in something
- ANS-Opportunity costs
\Chantelle grows tomatoes and sells them at the farmer's market. Because the price of
tomatoes rises, she is encouraged to grow and sell more. This is an example of price
functioning as - ANS-incentive
\Cornell can type reports faster and more accurately than Alice, so Cornell has a ________
in typing reports - ANS-Absolute advantage
\During the coronavirus pandemic, global supply chain issue caused the supply of new cars
to shift left. While role did price play in the new car market? Price was a - ANS-Message to
potential buyers that the marginal cost of manufacturing new cars is rising
\Economists generally believe that the person should specialize in the production of a good
or service if - ANS-They can produce the product while forgoing fewer alternative products
than any other person
\On camping trips Katie, is much faster than her husband, Brett, at putting up a tent and
starting a fire. Who should do each task if they want to maximize their time sitting around the
campfire - ANS-They should first each focus on that task in which they a comparative
advantage. When one finishes the assigned task, they can help the other
\Price is functioning as a message when it - ANS-is a line of communication between buyers
and sellers in a market
\The table provides data on how long it takes Joachim and Zane to clean the bathrooms and
wash the windows at a home. Who has the comparative advantage in washing windows?
Joachim clean the bathrooms 4
Zane clean the bathrooms 3
Joachim wash the windows 10
Zane wash the windows 6 - ANS-Zane, because he has a lower opportunity cost
\The table provides data on how long it takes Marla and Jason to cook lasagna and chicken
curry. Marla's opportunity cost of making lasagna is __________ and Jason's is ______
Marla lasagna 4
Jason lasagna 3
Marla chicken curry 3
Jason chicken curry 1 - ANS-0.75 of a chicken curry; 0.33 of a chicken curry
\When a country's production mix becomes more specialized due to increased international
trade based on comparative advantage - ANS-Some industries in the country will shrink and
possibly disappear
\When a manager uses comparative advantage to assign tasks in a work place, then each: -
ANS-Task is assigned to the worker with the lowest opportunity cost for performing the task
