Test Questions without Answers
Chapter 15. Market Theory I.
Definitions of Markets and Their Functions. Ricardo's Comparative Advantage
Chapter 15 – Question 1
The output per worker in the USA and Great Britain is as follows:
| USA | GB | |
| Product A | 3 | 6 |
| Product B | 5 | 6 |
1) Which country has an absolute advantage in A?
2) Which country has an absolute advantage in B?
3) Which country has a comparative advantage in A?
4) Which country has a comparative advantage in B?
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Chapter 15– Question 2
The table below shows that Lily can type 10 pages in a day or translate 6 pages while Maria can type 12 pages or translate 4 pages.
| Typed Pages per Day | Translated Pages per Day | |
| Lily | 10 | 6 |
| Maria | 12 | 4 |
For Lily the opportunity cost of typing one page is
- 10 typed pages
- 6 translated pages
- 1.66 translated pages
- 0. 6 translated page
Enter your answer here
Chapter 15– Question 3
Which of the following statements is not correct
- Maria has an absolute in typing
- Lily has an absolute advantage in translating
- Maria has a comparative advantage in translating
- Lily has a comparative advantages in translating. Maria has a comparative and an absolute advantage in typing
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Chapter 15–Question 4
Your roommate and you have to write a paper for your economics class. It requires very much researching. You have realised too late that it is due the day after tomorrow. You are better at writing and at researching than your roommate. Why would any economist in the world - with the exception of your instructor - recommend that one of you should do all the writing and the other one all the researching? Use the table below to make the point.
| Time needed for researching | Time needed for writing | |||
| You | 20 hours | 8 hours | ||
| Your roommate | 30 hours | 15 hours |
Enter your answer here
Chapter 15– Question 5
Let's ignore for a moment that your instructor is likely to find out that the two papers were written by the same student. Which important thing do economists ignore when they advocate Ricardo's theory?
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