Question 1

If the PPF of an economy is a straight line, it means that the economy

a	Has constant opportunity costs for both goods
b	Has increasing opportunity costs for both goods
c	Has decreasing opportunity costs for both goods
d	Is equally good at producing both goods

Question 2

Which of the following would NOT cause a shift in the demand for tea

a	An increase in the price of coffee, a substitute for tea
b	An increase in the number of tea producers
c	Consumers' expectations of a rise in tea prices in the future
d	An increase in the incomes of tea drinkers

Question 3

Which of the following statements isTRUE?

a	If a country has comparative advantage in producing a good but not an absolute advantage, there are benefits of trade for that country
b	If a country has a comparative advantage in producing a good, it must also have an absolute advantage in that good
c	If a country has absolute advantage in producing all goods, there are no benefits of trade for that country
d	If a country has an absolute advantage in producing a good, it must also have a comparative advantage in that good

Question 4

Jesse works as a research assistant and is currently surveying participants in a study. In a typical work week Jesse can complete 24 surveys if he only works on surveys and works efficiently. Jesse's professor also wants him to read research papers. In the time it takes Jesse to read 1 research paper he can complete 3 surveys. If Jesse works efficiently, which of the following combinations of surveys and papers can he complete in a typical work week?

a	Read 72 papers and complete 0 surveys
b	Read 12 papers and complete 4 surveys
c	Read 4 papers and complete 12 surveys
d	Read 3 papers and complete 18 surveys

Question 5

Omar and Max are TAs for ECN 104, they have to grade assignments and write exam questions. In an hour, Omar can either grade 15 assignments or write 10 exam questions, Max can either grade 20 assignments or write 11 exam questions. Which of the following statements isTRUE?

a	Max exchanging 10 assignments he has graded for 6 exam questions Omar has written is a mutually beneficial transaction for both TAs
b	Max has the comparative advantage in writing exam questions
c	Omar has the absolute advantage in grading assignments
d	Omar has the comparative advantage in grading assignments