Answers CHS EconomicsComparative and Absolute Advantage

Comparative and Absolute Advantage — Unit test Answers

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Which best describes how specialized producers decrease their opportunity costs?

by reducing production costs

by focusing on target markets

by increasing production of certain items

by limiting the types of goods produced

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Motherboards, Inc., manufactures computer parts. The company’s total revenue is

the money the company earns after paying all of its production costs.

the total wages the company pays workers in its factories and stores.

the amount of money the company earns from selling an individual part.

the amount the company receives from the sale of all of its computer parts.

The graph is a marginal cost curve that compares expenses for producing apple pies.According to the graph, the marginal cost begins to increase when the producer makes

two pies.

three pies.

four pies.

five pies.

[BLANK]

elasticity

quality

time

quantity

Which statement best explains the role of producers in economics?

Producers supply goods and services.

Producers purchase goods and services.

Producers create theories about the market.

Producers sell shares for companies in the market.

Which quality best describes a producer with an absolute advantage?

efficient

fast

accurate

prolific

When supply is higher than demand, prices will

rise until the demand falls.

rise until the supply falls.

fall until the demand rises.

fall until the supply rises.

A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take?

The store owner would most likely raise the price of the spring jeans to encourage producers.

The store owner would most likely lower the price of the spring jeans to encourage producers.

The store owner would most likely raise the price of the spring jeans to encourage consumers.

The store owner would most likely lower the price of the spring jeans to encourage consumers.

Look at the chart comparing the price of graphic T-shirts to the quantity supplied.

demand curve.

demand schedule.

supply curve.

supply schedule.

This table shows the production possibility schedule for several major manufacturing companies in the automobile industry. Manufacturing CompanyTruck Parts Car PartsCompany A10 per hr.20 per hr.Company B10 per hr.25 per hr.Company C15 per hr.15 per hr.Company D20 per hr.25 per hr. Which manufacturing company has the comparative advantage for car parts?

Company A

Company B

Company C

Company D

This table shows the number of employees needed to fill lunch orders at several food trucks.Food Truck Number of Lunch Orders Number of Employees Frank’s Falafels 20 per hour 2 Kimchi Kim’s 25 per hour 3 Deli Delight 30 per hour 3 Lunch on the Go 25 per hour 2 Which food truck has the absolute advantage?

Frank’s Falafels

Kimchi Kim’s

Deli Delight

Lunch on the Go

The chart shows the marginal cost and marginal revenue of producing apple pies. What most likely will happen if the pie maker continues to make additional pies?

The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.

The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.

The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.

The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.

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Comparative and Absolute Advantage — Unit test Answers

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