Title: Principles of Advantage
Course: Demo 1

Q: A nation has an absolute advantage if:
- it is the only source of a product
- it can make more of a product using fewer resources than other countries
- it has a lower opportunity cost than other countries
A: it is the only source of a product; it can make more of a product using fewer resources than other countries

Q: If an organization can produce more of a product with fewer resources than anyone else it has a(n) ________.
- comparative advantage
- labor advantage
- absolute advantage
A: absolute advantage

Q: When determining which country has a comparative advantage in producing a good or service, one must consider:
- balance of trade
- balance of payments
- opportunity cost
A: opportunity cost

Q: Adam’s Apple Farm provides apples to the local markets in Hooverville. Betty’s Apple Farm also provides apples to the market. Adam has just reduced his labor force by 25% because he found a way to put wheels on the ladders of his workers. This smaller work force can now they can pick more apples per day than Betty’s workers. Adam’s Apple Farms has a(n):
- comparative advantage
- labor advantage
- absolute advantage
A: absolute advantage

Q: Rare earth minerals are used in the manufacture of electronic devices such as computers and cell phones. These minerals are exactly what their name implies “rare” and the vast majority of them are mined in China. When considering the mining of these minerals, China has a(n):
- comparative advantage.
- competitive advantage.
- absolute advantage.
A: absolute advantage.

Q: ________ is the value of choices not selected.
- Absolute cost
- Balance of payments
- Opportunity cost
A: Opportunity cost

Q: Liam has an opportunity to work on Friday night where he will make $60. Instead he chooses to go to a movie with his friends that costs $12, and he spends $6 on popcorn. The opportunity cost of the movie for Liam is:
- $18
- $42
- $60
A: $60

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making athletic shoes and digital music playing devices, but they are not equally effective at both. If Shoeland spends all its time on a single product, it can either produce 100 pairs of shoes or 5 digital music devices. If Podtopia spends all its time on a single product, it can produce either 150 pairs of shoes or 30 digital music devices. The table below shows reflects these production possibilities. What is Shoeland’s opportunity cost for producing one digital music device?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- 10 pairs of shoes
- 100 pairs of shoes
- 20 pairs of shoes
A: 20 pairs of shoes

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making both athletic shoes and digital music playing devices, but they are not equally effective at both. If Shoeland spends all its time on a single product, it can either produce 100 pairs of shoes or 5 digital music devices. If Podtopia spends all its time on a single product, it can produce either 150 pairs of shoes or 30 digital music devices. The table below shows reflects these production possibilities. What is Podtopia’s opportunity cost for producing one digital music device?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- 15 pairs of shoes
- 150 pairs of shoes
- 5 pairs of shoes
A: 5 pairs of shoes

Q: Two countries, Shoeland and Podtopia, are participating in trade. Both countries are capable of making both athletic shoes and digital music playing devices, but they are not equally effective at both. The table below shows what each country is capable of producing if all labor is focused on a single product. Which statement(s) below are correct?

Product | Shoeland | Podtopia
Pair of Shoes | 100 | 150
Digital Music Devices | 5 | 30
- Shoeland has an comparative advantage in both products
- Shoeland has an comparative advantage in shoes and Podtopia has an absolute advantage in digital music devices.
- Podtopia has an comparative advantage in both products
A: Podtopia has an comparative advantage in both products