Micro Economics MCQ (GK Set-1) with Answers

Micro Economics MCQ (GK Set-1) with Answers

51) Suppose the world consists of two countries: the UK and Spain. Further, suppose there are only two goods--food and clothing. Which of the following statements is true?

If the UK has an absolute advantage in the production of food, then Spain must have an absolute advantage in the production of clothing

If the UK has a comparative advantage in the production of food, Spain might also have a comparative advantage in the production of food.

If the UK has a comparative advantage in the production of food, it must also have a comparative advantage in the production of clothing.

If the UK has a comparative advantage in the production of food, then Spain must have a comparative advantage in the production of clothing

Answer is:

If the UK has a comparative advantage in the production of food, then Spain must have a comparative advantage in the production of clothing

52) Use the production possibilities frontiers in Exhibit 4 to answer the question. Assume each country has the same number of workers, say 20 million, and that each axis is measured in metric tons per month. Argentina has a comparative advantage in the pro

Answer is:

beef

53) Use the production possibilities frontiers in Exhibit 4 to answer the question. Assume each country has the same number of workers, say 20 million, and that each axis is measured in metric tons per month. Peru will export

Answer is:

fruit

54) Use the production possibilities frontiers in Exhibit 4 to answer the question. Assume each country has the same number of workers, say 20 million, and that each axis is measured in metric tons per month. The opportunity cost of producing a metric ton of b

Answer is:

3 tons of fruit.

55) Joe is a tax accountant. He receives Rs.100 per hour doing tax returns. He can type 10,000 characters per hour into spreadsheets. He can hire an assistant who types 2,500 characters per hour into spreadsheets. Which of the following statements is true?

Answer is:

Joe should hire the assistant as long as he pays the assistant less than Rs.25 per hour.

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