1. Suppose the PPC of a producer producing two goods, A and B, is a straight line. Which of the following is true regarding the opportunity cost for the producer? (1 point)

	For every extra unit of A produced, the producer does not give up any of B.
	For every extra unit of A produced, the producer gives up less of B.
	For every extra unit of A produced, the producer gives up more of B.
	For every extra unit of A produced, the producer gives up the same amount of B.
	For every extra unit of A produced, the producer is able to produce more of B.

2. The table below shows the production of goods in two countries, A and B, for jewelry and cloth.

Country	Jewelry (in units)	Cloth (in units)
A	84	21
B	12	120

What type of production advantage do A and B have in producing cloth? (1 point)

	A has a comparative advantage in producing cloth, but B has no advantage in producing cloth.
	A has an absolute advantage in producing cloth, but B has no advantage in producing cloth.
	A has no advantage in producing cloth, but B has an absolute advantage in producing cloth.
	Both A and B have a comparative advantage in producing cloth.
	Both A and B have an absolute advantage in producing cloth.

3. The following table shows the demand, supply, and prices for books in the market. What is the equilibrium price for books, and how is the market impacted if the price rises above equilibrium level? (1 point)

Price (per unit)	Quantity demanded (in thousands)	Quantity supplied (in thousands)
$10	19	39
$8	21	32
$6	25	25
$4	28	19
$2	34	11

	The equilibrium price of books is $4, and at above equilibrium prices, there will be a shortage of books.
	The equilibrium price of books is $6, and at above equilibrium prices, there will be a shortage of books.
	The equilibrium price of books is $6, and at above equilibrium prices, there will be a surplus of books.
	The equilibrium price of books is $8, and at above equilibrium prices, there will be a surplus of books.
	The equilibrium price of books is $8, and at above equilibrium prices, there will be a shortage of books.

4.Use the graph to answer the question that follows.

Price/$ $1 p3 p1 p2 d3 d1 d2 0 q2 91 93 QuantityPrice/$ $1 P' P* d1 O Q Quantity