Economy Worksheet

Description

17 attachmentsSlide 1 of 17attachment_1attachment_1attachment_2attachment_2attachment_3attachment_3attachment_4attachment_4attachment_5attachment_5attachment_6attachment_6attachment_7attachment_7attachment_8attachment_8attachment_9attachment_9attachment_10attachment_10attachment_11attachment_11attachment_12attachment_12attachment_13attachment_13attachment_14attachment_14attachment_15attachment_15attachment_16attachment_16attachment_17attachment_17.slider-slide > img { width: 100%; display: block; }
.slider-slide > img:focus { margin: auto; }

Unformatted Attachment Preview

Chapter 2
©McGraw-Hill Education. All rights reserved.
1. Explain and apply the Principle of Comparative
Advantage
2. Explain and apply the Principle of Increasing
Opportunity Cost (also called the Low-Hanging-Fruit
Principle)
3. Identify factors that shift the menu of production
possibilities
4. Explain and apply the role of comparative advantage
in international trade and describe why some jobs
are more vulnerable to outsourcing than others
©McGraw-Hill Education. All rights reserved.
2-2
• Joe Jamail, a highly successful trial attorney,
employs another attorney to write his will
– Writing your own will: 2 hours
– Opportunity cost of 2 hours: $10,000+
– Hiring someone to spend 4 hours
on your will: $3,200
– Making the right economic choice: priceless
• Do It Yourself only when
Opportunity cost < hired cost ©McGraw-Hill Education. All rights reserved. 2-3 • A person has an absolute advantage at a particular task if he or she can perform the task in fewer hours than the other person • A person has a comparative advantage at a particular task if his or her opportunity cost of performing the task is lower than the other person’s opportunity cost ©McGraw-Hill Education. All rights reserved. 2-4 The Principle of Comparative Advantage Everyone does best when each person (or each country) concentrates on the activities for which his or her opportunity cost is the lowest. ©McGraw-Hill Education. All rights reserved. 2-5 • Two parties have different opportunity costs for two activities – Concentrate on the activities for which you have the lowest opportunity cost • Total value of output increases with specialization and trade ©McGraw-Hill Education. All rights reserved. 2-6 Production Times Mary Paula Web Update Bike Repair 20 minutes 30 minutes 10 minutes 30 minutes • Paula and Mary can each update web pages and repair bikes • Mary has an absolute advantage in both – Comparative advantage drives specialization ©McGraw-Hill Education. All rights reserved. 2-7 Production Times Mary Paula Opportunity Cost Mary Paula Web Update Bike Repair 20 minutes 30 minutes 10 minutes 30 minutes Web Update Bike Repair 2 repairs 1 repair 0.5 update 1 update ©McGraw-Hill Education. All rights reserved. 2-8 Production Times Mary Paula Hourly Output Mary Paula Web Update Bike Repair 20 minutes 30 minutes 10 minutes 30 minutes Web Update 3 updates 2 updates Bike Repair 6 repairs 2 repairs ©McGraw-Hill Education. All rights reserved. 2-9 Hourly Output Mary Paula Web Update 3 updates Bike Repair 6 repairs 2 updates 2 repairs • 16 web updates are ordered – Mary spends half her time at each activity: 12 updates and 24 repairs – Paula produces 4 updates and 12 repairs – Total output 16 updates and 36 repairs • Specialization produces 16 updates and 48 repairs – 12 more repairs for the same inputs! ©McGraw-Hill Education. All rights reserved. 2-10 Hourly Output Pat Meg Web Update Bike Repair 2 updates 3 updates 1 repair 3 repairs • This table shows output per hour – Apply the Principle of Comparative Advantage • Look at opportunity cost per unit • Pat repairs bikes and Meg updates web pages Opportunity Cost Pat Meg Web Update Bike Repair ½ repair 1 repair 2 updates 1 update ©McGraw-Hill Education. All rights reserved. 2-11 • None since 1941 – Not a decline in athletic ability • Specialization keeps averages lower – Pitching and fielding skills have improved • Pitchers specialize in starters, middle relievers, and closers; right- or left-handed batters; strike outs • Fielders play one position • Specialized coaches • Detailed analysis of hitters' weaknesses ©McGraw-Hill Education. All rights reserved. 2-12 • Talent • Natural resources • Cultures or societal norms – Languages – Institutions • Value placed on craftsmanship • Support for entrepreneurship ©McGraw-Hill Education. All rights reserved. 2-13 – Unattainable point – Attainable point • Inefficient point • Efficient point Coffee (lb/day) • A production possibilities curve illustrates the combinations of two goods that can be produced with given resources 24 A Unattainable • Definitions: Combination 16 8 • Scarcity Principle – Give up one good to get another ©McGraw-Hill Education. All rights reserved. B Inefficient Combination C D 4 8 12 Nuts (lb/day) 2-14 • Two goods: coffee and nuts – Work 6 hours per day • 1 hour of labor Coffee (lb/day) = 4 pounds of coffee OR = 2 pounds of nuts – Graph shows options • Negative slope 24 16 8 A B C D 4 8 12 Nuts (lb/day) ©McGraw-Hill Education. All rights reserved. 2-15 • Marginal cost: – 8 coffee • Marginal benefit: 4 nuts • Marginal cost: – 8 nut • Marginal benefit: 16 coffee 24 Coffee (lb/day) Loss in coffee Gain in nuts • Opportunity cost of 1 nut is 2 coffee A B 16 C 8 Loss in nuts Gain in coffee • Opportunity cost of 1 coffee is ½ nut ©McGraw-Hill Education. All rights reserved. 4 8 D 12 Nuts (lb/day) 2-16 – Work 6 hours per day • Productivity determines the slope of the PPC • Opportunity cost – Marginal cost: – 4 coffee – Marginal benefit: 8 nuts • Tom's opportunity cost of 1 coffee is 2 nuts • His opportunity cost of 1 nut is ½ coffee 12 Coffee (lb/day) – 1 hour of labor = 4 pounds of nuts OR = 2 pounds of coffee A B 8 C 4 D 8 16 24 Nuts (lb/day) ©McGraw-Hill Education. All rights reserved. 2-17 24 Coffee (lb/day) • PPCs show comparative advantage • Sue's curve is steeper, better for coffee • Tom's curve is flatter, better for nuts • Comparative advantage is a comparison • To get 1 coffee • Sue gives up ½ nuts • Tom gives up 2 nuts Susan’s PPC 12 ©McGraw-Hill Education. All rights reserved. Tom’s PPC 12 Nuts (lb/day) 24 2-18 • Without trade, each person can consume along his production possibilities curve – What you produce determines what you consume • With trade, each person's consumption can be greater than production – Produce according to comparative advantage – Trade to get what you want ©McGraw-Hill Education. All rights reserved. 2-19 Coffee (lb/day) 24 Susan and Tom exchange 12 nuts, 12 coffee 12 8 • Preferred diet is half nuts, half coffee – No trade: 8 pounds of coffee and 8 pounds of nuts • Total output is 32 pounds • Specialization gives each person 12 pounds of each good – 48 total pounds 8 12 Nuts (lb/day) 24 ©McGraw-Hill Education. All rights reserved. 2-20 Sue's PPC Coffee (lb/day) 24 Trade benefits With trade 12 Tom's PPC 4 No trade 4 12 Nuts (lb/day) 24 • Benefits increase when differences in opportunity cost increase – Sue's opportunity cost of one pound of nuts increases to 6 coffee – Tom's opportunity cost of one pound of coffee increases to 6 nuts • No trade: 3.4 nuts and 3.4 coffee each • With trade: 12 nuts and 12 coffee each ©McGraw-Hill Education. All rights reserved. 2-21 Coffee (1000s of lb/day) • Two goods: coffee and nuts • Multiple people • Different opportunity costs 100 95 9 0 A B • Intercepts show maximum production of one good • Some resources better at coffee, some better at nuts C D E 20 1 5 20 3 0 Nuts (1000s of lb/day) ©McGraw-Hill Education. All rights reserved. 75 80 77 2-22 • Maximum coffee: 100,000 lb / day Coffee (1000s of lb/day) – Give up 5,000 pounds coffee, get 20,000 pounds of nuts – Give up another 5,000 pounds of coffee, get 10,000 additional pounds of nuts 100 95 90 A B C D E 20 15 20 30 Nuts (1000s of lb/day) ©McGraw-Hill Education. All rights reserved. 75 80 77 2-23 Then move to next highest opportunity cost And still higher opportunity cost ©McGraw-Hill Education. All rights reserved. Decreasing productivity Start with resources with lowest opportunity cost 2-24 • A PPC represents current choices – Changes in choices occur over time due to • More resources – Investment in capital – Population growth • Improvements in technology – More specialization: start-up and switching costs • Increases in knowledge ©McGraw-Hill Education. All rights reserved. 2-25 Neutral Technical Change Coffee Technical Change in Coffee Coffee Nuts Nuts Coffee Technical Change in Nuts Nuts ©McGraw-Hill Education. All rights reserved. 2-26 • Specialization is easier when – Population density passes a threshold – Markets are connected • Transportation for goods • Communications for services – Legal framework supports business – Financial markets enable start-ups ©McGraw-Hill Education. All rights reserved. 2-27 • Imagine this: – Your hair stylist only cuts blonde hair – An expert in tropical diseases opens a practice in a town of 500 people in Wisconsin – Seven bookstores, each open a different day of the week ©McGraw-Hill Education. All rights reserved. 2-28 • Principle of Comparative Advantage and gains from trade apply worldwide – Potentially large gains from trading with different and distant countries • Trade can be controversial – Trade benefits society broadly – Costs are concentrated • Some industries suffer • People lose their jobs ©McGraw-Hill Education. All rights reserved. 2-29 • Service work performed overseas by low wage workers has been termed outsourcing – Medical transcription – Customer call centers ? ? Medical tourism Technical writing • Limits to outsourcing – Quality control – Physical presence (haircuts) – Complex communications – Understand nuance • Greatest security for workers is the ability to adapt quickly to changing circumstances ©McGraw-Hill Education. All rights reserved. 2-30 Comparative Advantage Specialization and Gains from Trade Outsourcing Increasing Opportunity Cost Production Possibilities Curve Individual Shift PPC Economy 2-31 ©McGraw-Hill Education. All rights reserved. Chapter 1 ©McGraw-Hill Education. All rights reserved. 1. Explain and apply the Scarcity Principle 2. Explain and apply the Cost-Benefit Principle 3. Discuss three important pitfalls that occur when applying the Cost-Benefit Principle inconsistently 4. Explain and apply the Incentive Principle ©McGraw-Hill Education. All rights reserved. 1-2 Economics: The study of how people make choices under scarcity and the results of these choices for society. The Scarcity Principle: People have unlimited wants and limited resources. Having more of one good means having less of another. Also called No Free-Lunch Principle ©McGraw-Hill Education. All rights reserved. 1-3 Scarcity is involved in Global warming Political elections Career choices ©McGraw-Hill Education. All rights reserved. Buying bottled water 1-4 • Take an action if and only if the extra benefits are at least as great as the extra costs • Costs and benefits are not just money Marginal Benefits Marginal Costs ©McGraw-Hill Education. All rights reserved. 1-5 • Assume people are rational – A rational person has well defined goals and tries to fulfill those goals as best they can • Would you walk to town to save $10 on an item? – Benefits are clear – Costs are harder to define • Hypothetical auction – Would you walk to town if someone paid you $9? – If you would walk to town for less than $10, you gain from buying the item in town ©McGraw-Hill Education. All rights reserved. 1-6 You clip grocery coupons but Bill and Melinda Gates do not You speed on the way to work but not on the way to school At the ball park, you pay extra to buy a soda from the hawkers in the stands You skip your regular dental check-up ©McGraw-Hill Education. All rights reserved. 1-7 • The economic surplus of an action is equal to its benefit minus its costs Total Costs Total Benefits Economic Surplus ©McGraw-Hill Education. All rights reserved. 1-8 • Opportunity cost is the value of what must be foregone in order to undertake an activity – Consider explicit and implicit costs • Examples: – Give up an hour of babysitting to go to the movies – Give up watching TV to walk to town • Caution: NOT the combined value of all possible activities – Opportunity cost considers only your best alternative ©McGraw-Hill Education. All rights reserved. 1-9 • Simplifying assumptions – Which aspects of the decision are absolutely essential? – Which aspects are irrelevant? • Abstract representation of key relationships – The Cost-Benefit Principle is a model • If costs of an action increase, the action is less likely • If benefits of an action increase, the action is more likely ©McGraw-Hill Education. All rights reserved. 1-10 • Economic analysis predicts likely behavior • Three general cases of mistakes 1. Measuring costs and benefits as proportions instead of absolute amounts 2. Ignoring implicit costs 3. Failure to think at the margin ©McGraw-Hill Education. All rights reserved. 1-11 Measuring costs and benefits as proportions instead of absolute amount • Would you walk to town to save $10 on a $25 item? • Would you walk to town to save $10 on a $2,500 item? Marginal Benefits Marginal Costs ©McGraw-Hill Education. All rights reserved. Action 1-12 #2 Ignoring implicit costs • Consider your alternatives – The value of a Frequent Flyer coupon depends on its next best use • Expiration date • Do you have time for another trip? • Cost of the next best trip Explicit Costs Opportunity Cost Implicit Costs ©McGraw-Hill Education. All rights reserved. 1-13 Failure to think at the margin • Sunk costs cannot be recovered Marginal Benefits – Examples: • Eating at an all-you-caneat restaurant • Attend a second year of law school ©McGraw-Hill Education. All rights reserved. Marginal Costs 1-14 • Marginal cost is the increase in total cost from one additional unit of an activity – Average cost is total cost divided by the number of units • Marginal benefit is the increase in total benefit from one additional unit of an activity – Average benefit is total benefit divided by the number of units ©McGraw-Hill Education. All rights reserved. 1-15 # of Launches Total Cost ($B) Marginal Average Cost Cost ($B/launch) ($B) 0 $0 $0 1 $3 $3 $3 $4 2 $7 $3.5 3 $12 $4 4 $20 5 $32 $5 $8 $5 $12 $6.4 If the marginal benefit is $6 billion per launch, how many launches should NASA make? ©McGraw-Hill Education. All rights reserved. 1-16 – Normative economic principle says how people should behave • Gas prices are too high • Building a space base on the moon will cost too much – Positive economic principle predicts how people will behave • The average price of gasoline in May 2010 was higher than in May 2009 • Building a space base on the moon will cost more than the shuttle program ©McGraw-Hill Education. All rights reserved. 1-17 Incentives are central to people's choices Benefits Costs Actions are more likely to be taken if their benefits rise Actions are less likely to be taken if their costs rise ©McGraw-Hill Education. All rights reserved. 1-18 ? Microeconomics studies choice and its implications for price and quantity in individual markets ? Sugar ? Carpets ? House cleaning services ? Microeconomics considers topics such as ? Costs of production ? Demand for a product ? Exchange rates ? Macroeconomics studies the performance of national economies and the policies that governments use to try to improve that performance ? Inflation ? Unemployment ? Growth ? Macroeconomics considers ? Monetary policy ? Deficits ? Tax policy ©McGraw-Hill Education. All rights reserved. 1-19 • Focus in this course is on a short list of powerful ideas – Explain many economic issues – Predict decisions made in a variety of circumstances • Core Principles are the foundation for solving economic problems ©McGraw-Hill Education. All rights reserved. 1-20 • There are many things that economics can help to explain • Economic Naturalist topics – Why is expensive software bundled with PCs? – Why can't you buy a car without heaters – Drive-up ATMs with Braille ©McGraw-Hill Education. All rights reserved. 1-21 Chapter 1 Appendix ©McGraw-Hill Education. All rights reserved. • Equation • Variable – Dependent variable – Independent variable • Parameter (constant) – Slope – Intercept ©McGraw-Hill Education. All rights reserved. 1-23 • Identify the variables • Calculate the parameters – Slope – Intercept • Write the equation • Example: Phone bill is $5 per month plus 10 cents per minute B = 5 + 0.10 T ©McGraw-Hill Education. All rights reserved. 1-24 B = 5 + 0.10 T – Draw and label axes • Horizontal is independent variable • Vertical is dependent variable – To graph, • Plot the intercept • Plot one other point • Connect the points B D 12 C 8 6 5 A 10 ©McGraw-Hill Education. All rights reserved. 30 70 T 1-25 – Identify variables • Independent • Dependent – Identify parameters • Intercept • Slope – Write the equation B = 4 + 0.2 T ©McGraw-Hill Education. All rights reserved. 1-26 – An increase in the intercept shifts the curve up • Slope is unchanged • Caused by an increase in the monthly fee – A decrease in the intercept shifts the curve down • Slope is unchanged ©McGraw-Hill Education. All rights reserved. 1-27 – An increase in the slope makes the curve steeper • Intercept is unchanged • Caused by an increase in the per minute fee – A decrease in the slope makes the curve flatter • Intercept is unchanged ©McGraw-Hill Education. All rights reserved. 1-28 Time (minutes/month) 10 20 30 40 Bill ($/month) $10.50 $11.00 $11.50 $12.00 – Identify variables • Independent • Dependent – Label axes – Plot points • Connect points ©McGraw-Hill Education. All rights reserved. 1-29 Time (minutes/month) 10 20 30 40 Bill ($/month) $10.50 $11.00 $11.50 $12.00 – Identify independent and dependent variables – Calculate slope • Slope = (11.5 – 10.5) / (30 – 10) = 1/20 = 0.05 – Solve for intercept, f, using any point B = f + 0.05 T 12 = f + 0.05 (40) = f + 2 f = 12 – 2 = 10 B = 10 + 0.05 T ©McGraw-Hill Education. All rights reserved. 1-30 • Two equations, two unknowns • Solving the equations gives the values of the variables where the two equations intersect – Value of the independent and dependent variables are the same in each equation • Example – Two billing plans for phone service • How many minutes make the two plans cost the same? ©McGraw-Hill Education. All rights reserved. 1-31 • Plan 1 B= 10 + 0.04 T • Plan 2 B= 20 + 0.02 T – Plan 1 has higher per minute price while Plan 2 has a higher monthly fee • Find B and T for point A ©McGraw-Hill Education. All rights reserved. 1-32 – Plan 1 B = 10 + 0.04 T – Plan 2 B = 20 + 0.02 T – Subtract Plan 2 equation from Plan 1 and solve for T B = 10 + 0.04 T – B = – 20 – 0.02 T 0 = – 10 + 0.02 T T = 500 – Find B when T = 500 B = 10 + 0.04 T B = 10 + 0.04 (500) B = $30 OR B = 20 + 0.02 T B = 20 + 0.02 (500) B = $30 ©McGraw-Hill Education. All rights reserved. 1-33 Question 4 (1 point) Refer to the table below. According to the table, Corey has the absolute advantage in: Pizzas Made Per Hour 12 Pizzas Delivered Per Hour 6 15 Corey Pat 10 A) making and delivering pizza. B) delivering pizza. C) neither making nor delivering pizza. D) making pizza. Question 5 (1 point) On a graph of a production possibilities curve, an inefficient point is: A) necessarily an attainable point. B) necessarily an unattainable point. C) not necessarily an attainable point. D) possibly an unattainable point. Question 1 (1 point) The field of economics that would be most concerned with a recent fall in interest rates is: A) macroeconomics. B) microeconomics. C) economic naturalism. D) marginal economics. Question 2 (1 point) All else equal, relative to a person who earns minimum wage, a person who earns $30 hour has: A) a higher opportunity cost of working an additional hour. B) a higher opportunity cost of taking the day off work. C) a lower opportunity cost of driving farther to work. D) the same opportunity cost of spending time on leisure activities. Question 3 (1 point) You are the Minister of Trade for a small island country with the following annual PPC: 500 Annual PPC on Your Island Coconuts Per Year 1,500 Fish Per Year You are negotiating a trade agreement with a neighboring island with the following annual PPC: 500 Annual PPC on Neighboring Island Coconuts Per Year 2,500 Fish Per Year If you offer to give the other island 1 coconut for every 4 fish they give you, then they will: A) accept your offer because their opportunity cost of a coconut is greater than 4 fish. B) refuse your offer because they have a comparative advantage in fish. C) refuse your offer because they can produce as many coconuts as you can. D) accept your offer because your opportunity cost of a coconuts is less than 4 fish. Question 6 (1 point) You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. Should you go see a movie or work as a math tutor? A) You should go to the movies. B) Both options are equally good. C) You should work as a math tutor. D) You should do neither. Question 7 (1 point) Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct? A) Tracy should specialize in sandwiches and smoothies. B) Dan should specialize in sandwiches, and Tracy should specialize in smoothies. C) Dan should specialize in both sandwiches and smoothies. D) Dan should specialize in smoothies, and Tracy should specialize in sandwiches. Question 8 (1 point) The Incentive Principle is an example of: A) an economic decision-making pitfall. 0 B) a positive economic principle. C) over-estimating the benefits of an action. D) a normative economic principle. Question 9 (1 point) You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. Your economic surplus from going to work instead of seeing SPAM on Saturday is: A) $35 B) $36 C) $1 D) $0 Question 10 (1 point) The production possibilities curve shows: A) how increasing the resources used to produce one good increases the production of the other good. B) the maximum production of one good for every possible production level of the other good. the minimum production of one good for every possible production level of the other good. D) how increasing the production of one good allows production of the other good to also rise. Question 17 (1 point) A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. If the firm sells each computer for $625, then how many hours a day should the firm employ Pam to maximize its net benefit from her employment? A) 2 hours B) 1 hour C) 3 hours D) 4 hours Question 18 (1 point) Moe has a big exam tomorrow. He considered studying this evening, but decided to hang out with Curly instead. If neither activity involves any explicit costs, and Moe always chooses rationally, it must be true that: A) Moe gets more benefit from spending time with Curly than from studying. B) the opportunity cost of studying is less than the value Moe gets from spending time with Curly. C) Moe gets less benefit from spending time with Curly than from studying. D) the opportunity cost of studying is greater than the value Moe gets from spending time with Curly. Question 19 (1 point) Refer to the figure below. As the production of pizza increases, the opportunity cost of producing pizza: 125 100 75 Salads Per Hour 50 25 0 0 10 20 30 35 38 40 Pizzas Per Hour A) become negative. B) decreases. C) increases. D) doesn't change. Question 20 (1 point) A country is most likely to have a comparative advantage in the production of cars if: A) it has a relative abundance in the natural resources needed to produce cars. B) its citizens prefer driving cars to other forms of transportation. C) it has strict environmental protection laws governing automobile emissions. D) it imports most of the raw materials necessary to produce cars. Question 13 (1 point) The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. Marginal Benefit Total Cost $900 Marginal Cost CPU GHz 2.0 2.5 3.0 3.5 4.0 Total BO efit $1.000 $1,400 $100 $300 $1.200 $1.500 $1,900 $2.000 $400 The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is: A) $300. B) $200. C) $100. D) $400. Question 14 (1 point) Refer to the table below. The average cost of 4 units of this activity is: Units of Activity 0 1 2 3 Total Cost SO $30 $40 $60 $100 $150 $210 Total Benefit $0 $100 $160 $190 $210 $220 $225 + 5 6 A) $25 O B) $40 C) $30 D) $20 Question 15 (1 point) An individual has an absolute advantage in producing pizzas if that individual: A) has a higher opportunity cost of producing pizzas than anyone else. B) charges the lowest price for pizzas. C) has a lower opportunity cost of producing pizzas than anyone else. D) can produce more pizzas in a given amount of time than anyone else. Question 16 (1 point) The table below shows the relationship between the number of times you get your car washed each month and your total monthly benefit from car washes. Each car wash costs $15. Number of Car Washes Per Month 0 1 2 3 4 5 Total Monthly Benefit from Car Washes $0 $20 $36 $48 $56 $60 + What is the marginal benefit of the 3rd car wash each month? A) $48 B) $16 C) $4 D) $12 Question 19 (1 point) Refer to the figure below. As the production of pizza increases, the opportunity cost of producing pizza: 125 100 75 Salads Per Hour 50 25 0 0 10 20 30 35 38 40 Pizzas Per Hour A) become negative. B) decreases. C) increases. D) doesn't change. Question 20 (1 point) A country is most likely to have a comparative advantage in the production of cars if: A) it has a relative abundance in the natural resources needed to produce cars. B) its citizens prefer driving cars to other forms of transportation. C) it has strict environmental protection laws governing automobile emissions. D) it imports most of the raw materials necessary to produce cars. Question 16 (1 point) The table below shows the relationship between the number of times you get your car washed each month and your total monthly benefit from car washes. Each car wash costs $15. Number of Car Washes Per Month 0 Total Monthly Benefit from Car Washes $0 $20 $36 1 $48 2 3 4 5 $56 $60 What the marginal benefit of the 3rd car wash each month? A) $48 B) $16 C) $4 D) $12 Question 11 (1 point) Saved Refer to the figure below. Moving from point C to point B, the opportunity cost of 25 more salads is: 125 100 75 Salads Per Hour 50 25 0 10 20 30 35 38 40 Pizzas Per Hour O A) 10 pizzas. B) 30 pizzas. C) 15 pizzas. D 5 pizzas. Question 12 (1 point) If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then has an) advantage in producing shoes. A) Jane; comparative B) Jane; absolute C) Bob; absolute D) Bob; comparative Question 4 (1 point) Refer to the table below. According to the table, Corey has the absolute advantage in: Pizzas Made Per Hour 12 10 Pizzas Delivered Per Hour 6 15 Corey Pat A) making and delivering pizza. O o B) delivering pizza. C) neither making nor delivering pizza. O D) making pizza. Question 5 (1 point) On a graph of a production possibilities curve, an inefficient point is: A) necessarily an attainable point. B) necessarily an unattainable point. C) not necessarily an attainable point. D) possibly an unattainable point. Purchase answer to see full attachment Tags: Economy principle minister of trade User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.