Multiple Choice
1,If one person can perform a task in fewer
hours than another,you know the person has
________________in performing the task.
a,an absolute advantage.
b,a comparative advantage.
c,both a comparative advantage and an absolute
advantage.
d,neither an absolute nor a comparative advantage.
e,either an absolute or a comparative advantage
2,If a person's opportunity cost of performing
a task is lower than another person's,you
know the person has _________ in performing
the task.
a,an absolute advantage.
b,a comparative advantage.
c,both a comparative advantage and an absolute
advantage.
d,neither an absolute nor a comparative advantage.
e,either an absolute or a comparative advantage
3.Which of the following can be a
source of comparative advantage
for an individual?
a,inborn talent
b,education
c,training
d,experience
e,all of the above
4,Which of the following can be a
source of comparative advantage
for a nation?
a,natural resources
b,entrepreneurship
c,speaking the English language
d,standards of production quality
e,all of the above
5,If a country experiences
increasing opportunity costs,its
production possibilities curve will
a,be a straight line.
b,bow outward.
c,bow inward.
d,shift out from the origin.
e,shift in toward the origin
6,According to the Low-Hanging Fruit
Principle,in expanding production of a
good,you should first employ those
resources
a,where you have comparative advantage.
b,where you have absolute advantage.
c,with the highest opportunity cost.
d,with the lowest opportunity cost.
e,that have the lowest price,
7,Which of the following is the basis
for an argument against free trade?
a,The Principle of Comparative Advantage
b,the change in the total value of goods
and services resulting from trade
c,the distribution of the benefits from trade
d,The Principle of Increasing Opportunity
Costs
e,all of the above