ECN 306 Week 2 Exam 1 Questions with Correct Answers Latest Update 2025/2026
In his simplest argument in favor of free international trade, Adam Smith linkened nations to -
Answers households
The units of labor needed to produce one unit of output is the ____ of labor productivity -
Answers reciprocal
Suppose that over time the hours of labor needed to produce one unit (100 bushels) of
soybeans falls from 0.33 to 0.2. In this instance, we can say that labor's productivity increases
from ___ to ___ units of soybeans. - Answers 3, 5
Suppose it takes 0.25 hours of labor to produce one ton of steel. As a result, we can measure
labor productivity as ___ tons per labor hour. - Answers 4
Adam Smith's promotion of free trade worried those who wondered about the consequences for
nations that did not possess - Answers an absolute advantage
Ricardo's contribution to the development of trade theory was rooted in the concept ____ cost. -
Answers opportunity
Suppose a worker can, in one hour, produce either 6 widgets or 12 thingamajigs. In this case, we
say that the opportunity cost one widget is ___ thingamajigs. - Answers 2
According to the principle of comparative advantage, a country will export those goods and
services it can produce at a ___ opportunity cost than other countries. - Answers lower
According to Ricardo's principle of comparative advantage, even if a country is absolutely less
productive at producing everything, it will nevertheless have a comparative advantage in those
goods for which it is - Answers least disadvantaged.
Suppose one hour of labor in country ABC can produce either 4 pounds of cheese or 2 bottles of
wine. For this country the opportunity cost of a bottle of wine is ___ pounds of cheese and the
opportunity cost of a pound of cheese is ___ bottles of wine. - Answers 2, .5
Suppose a new pair of shoes is priced at $60 while a new pair of slacks for $30. In this case, the
relative price of shoes is ___ pair of slacks. - Answers 2
Consider a world with two countries (Elmira and Toledo) and two goods (oil and steel). Suppose
1 hour of labor in Elmira can produce 2 barrels of oil or 1 ton of steel while 1 hour of labor in
Toledo can produce 6 barrels of oil or 2 tons of steel.
In the absence of trade, the relative price of 1 ton of steel in Elmira is ___ barrels of oil while the
relative price of 1 ton of steel in Toledo is ___ barrels of oil. - Answers 2,3
Consider a world with two countries (Texas and Alberta) and two goods (oil and wheat), with the
pre-trade relative price of oil in Texas at 4 bushels of wheat and in Alberta at 8 bushels. If
In his simplest argument in favor of free international trade, Adam Smith linkened nations to -
Answers households
The units of labor needed to produce one unit of output is the ____ of labor productivity -
Answers reciprocal
Suppose that over time the hours of labor needed to produce one unit (100 bushels) of
soybeans falls from 0.33 to 0.2. In this instance, we can say that labor's productivity increases
from ___ to ___ units of soybeans. - Answers 3, 5
Suppose it takes 0.25 hours of labor to produce one ton of steel. As a result, we can measure
labor productivity as ___ tons per labor hour. - Answers 4
Adam Smith's promotion of free trade worried those who wondered about the consequences for
nations that did not possess - Answers an absolute advantage
Ricardo's contribution to the development of trade theory was rooted in the concept ____ cost. -
Answers opportunity
Suppose a worker can, in one hour, produce either 6 widgets or 12 thingamajigs. In this case, we
say that the opportunity cost one widget is ___ thingamajigs. - Answers 2
According to the principle of comparative advantage, a country will export those goods and
services it can produce at a ___ opportunity cost than other countries. - Answers lower
According to Ricardo's principle of comparative advantage, even if a country is absolutely less
productive at producing everything, it will nevertheless have a comparative advantage in those
goods for which it is - Answers least disadvantaged.
Suppose one hour of labor in country ABC can produce either 4 pounds of cheese or 2 bottles of
wine. For this country the opportunity cost of a bottle of wine is ___ pounds of cheese and the
opportunity cost of a pound of cheese is ___ bottles of wine. - Answers 2, .5
Suppose a new pair of shoes is priced at $60 while a new pair of slacks for $30. In this case, the
relative price of shoes is ___ pair of slacks. - Answers 2
Consider a world with two countries (Elmira and Toledo) and two goods (oil and steel). Suppose
1 hour of labor in Elmira can produce 2 barrels of oil or 1 ton of steel while 1 hour of labor in
Toledo can produce 6 barrels of oil or 2 tons of steel.
In the absence of trade, the relative price of 1 ton of steel in Elmira is ___ barrels of oil while the
relative price of 1 ton of steel in Toledo is ___ barrels of oil. - Answers 2,3
Consider a world with two countries (Texas and Alberta) and two goods (oil and wheat), with the
pre-trade relative price of oil in Texas at 4 bushels of wheat and in Alberta at 8 bushels. If
