Question 1

If Country X can produce more of a good than Country Y with the same amount of resources, then

ACountry X has a higher opportunity cost for producing that good than Country Y

BCountry X has a comparative advantage over Country Y in producing that good

CCountry Y has a comparative advantage over Country X in producing that good

DCountry X has an absolute advantage over Country Y in producing that good

ECountry Y has an absolute advantage over Country X in producing that good

Question 2

Which of the following events would cause the demand curve to shift left?

AThe price of the good increases.

BThe price of the good decreases.

CThe price of a substitute decreases.

DThe price of a complement decreases.

EA number of suppliers leave the market.

Question 3

Consumer tastes shift toward an increased preference for a good at the same time that the government subsidizes production of it. After this, the equilibrium quantity would ____ and the equilibrium price would ________.

Adecrease; increase

Bdecrease; decrease

Cincrease; decrease

Dincrease; be indeterminate

Edecrease; be indeterminate

Question 4

What would happen to the equilibrium price and quantity for a normal good if consumer incomes decreased?

AThe equilibrium price would decrease, and the equilibrium quantity would decrease.

BThe equilibrium price would decrease, and the equilibrium quantity would increase.

CThe equilibrium price would increase, and the equilibrium quantity would decrease.

DThe equilibrium price would increase, and the equilibrium quantity would increase.

EThere would be no change in either equilibrium price or quantity.

Question 5

Use the PPC below to answer the following question.