Tackle the Test: Multiple-Choice Questions

1. Question

   Use the graph to determine which country has an absolute advantage in producing each good.
   Absolute advantage in wheat productionAbsolute advantage in textile production

   A.

   Country ACountry B

   B.

   Country ACountry A

   C.

   Country BCountry A

   D.

   Country BCountry B

   E.

   Country ANeither country

   Use the graph to determine which country has an absolute advantage in producing each good.
2. Page 31

   Question

   For Country A, the opportunity cost of a bushel of wheat is

   A.

   ½ unit of textiles.

   B.

   unit of textiles.

   C.

   1 units of textiles.

   D.

   1½ units of textiles.

   E.

   2 units of textiles.

   For Country A, the opportunity cost of a bushel of wheat is

3. Question

   Use the graph to determine which country has a comparative advantage in producing each good.
   Comparative advantage in wheat productionComparative advantage in textile production

   A.

   Country ACountry B

   B.

   Country ACountry A

   C.

   Country BCountry A

   D.

   Country BCountry B

   E.

   Country ANeither country

   Use the graph to determine which country has a comparative advantage in producing each good.

4. Question

   If the two countries specialize and trade, which of the choices below describes the countries’ imports?
   Import wheatImport textiles

   A.

   Country ACountry A

   B.

   Country ACountry B

   C.

   Country BCountry B

   D.

   Country BCountry A

   E.

   Neither countryCountry B

   If the two countries specialize and trade, which of the choices below describes the countries’ imports?

5. Question

   What is the highest price Country B is willing to pay to buy wheat from Country A?

   A.

   ½ unit of textiles

   B.

   unit of textiles

   C.

   1 unit of textiles

   D.

   1½ units of textiles

   E.

   2 units of textiles

   What is the highest price Country B is willing to pay to buy wheat from Country A?