Trade and Opportunity Costs
This passage and table describe the opportunity costs faced by two countries.
1 The countries of Grand Coast and Toland are trading partners. The two main goods
traded are timber and fish. Every year the ministers of trade from each country
attend an international conference to discuss issues related to foreign trade and
decide how each country should specialize. The table provides economic data for
one year.
In Grand Coast, what is the opportunity cost of one unit of fish?
- A. ½ unit of timber
- B. 5 units of timber
- C. 2 units of fish
- D. 8 units of fish
Correct Answer & Rationale
Correct Answer: A
Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. In Grand Coast, if one unit of fish is produced, the opportunity cost is the amount of timber that could have been produced instead. Option A, ½ unit of timber, accurately reflects this trade-off, indicating that for each unit of fish, only half a unit of timber is sacrificed. Option B, 5 units of timber, overestimates the sacrifice, suggesting a much higher cost than what is actually incurred. Option C, 2 units of fish, misinterprets the concept, as it implies a cost in the same product rather than in timber. Option D, 8 units of fish, also incorrectly suggests a loss of the same good, failing to recognize the opportunity cost in terms of timber.
Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. In Grand Coast, if one unit of fish is produced, the opportunity cost is the amount of timber that could have been produced instead. Option A, ½ unit of timber, accurately reflects this trade-off, indicating that for each unit of fish, only half a unit of timber is sacrificed. Option B, 5 units of timber, overestimates the sacrifice, suggesting a much higher cost than what is actually incurred. Option C, 2 units of fish, misinterprets the concept, as it implies a cost in the same product rather than in timber. Option D, 8 units of fish, also incorrectly suggests a loss of the same good, failing to recognize the opportunity cost in terms of timber.
Other Related Questions
Before leaving Germany, where did most of the passengers intend to resettle?
- A. Cuba
- B. Great Britain
- C. France
- D. United States
Correct Answer & Rationale
Correct Answer: D
Most passengers intended to resettle in the United States due to its reputation as a land of opportunity and refuge for immigrants. The U.S. offered economic prospects and a chance for a fresh start, making it a primary destination for those leaving Germany. Option A, Cuba, was less appealing as it did not have the same level of immigration support or opportunities. Option B, Great Britain, while historically significant, was less favored due to its stringent immigration policies at the time. Option C, France, although attractive, did not match the U.S. in terms of the number of immigrants seeking a new life.
Most passengers intended to resettle in the United States due to its reputation as a land of opportunity and refuge for immigrants. The U.S. offered economic prospects and a chance for a fresh start, making it a primary destination for those leaving Germany. Option A, Cuba, was less appealing as it did not have the same level of immigration support or opportunities. Option B, Great Britain, while historically significant, was less favored due to its stringent immigration policies at the time. Option C, France, although attractive, did not match the U.S. in terms of the number of immigrants seeking a new life.
Which amendment has been interpreted to prohibit a state from collecting taxes to pay the salary of a leader of a religious group?
- A. Amendment 1
- B. Amendment 4
- C. Amendment 6
- D. Amendment 10
Correct Answer & Rationale
Correct Answer: A
Amendment 1 of the U.S. Constitution guarantees the free exercise of religion and prohibits the government from establishing a religion. This has been interpreted to mean that states cannot use tax revenues to fund religious leaders, ensuring a separation of church and state. Amendment 4 protects against unreasonable searches and seizures, which does not pertain to taxation or religious funding. Amendment 6 guarantees the right to a fair trial, unrelated to taxation issues. Amendment 10 reserves powers not delegated to the federal government for the states, but it does not address the specific prohibition against state funding of religious salaries.
Amendment 1 of the U.S. Constitution guarantees the free exercise of religion and prohibits the government from establishing a religion. This has been interpreted to mean that states cannot use tax revenues to fund religious leaders, ensuring a separation of church and state. Amendment 4 protects against unreasonable searches and seizures, which does not pertain to taxation or religious funding. Amendment 6 guarantees the right to a fair trial, unrelated to taxation issues. Amendment 10 reserves powers not delegated to the federal government for the states, but it does not address the specific prohibition against state funding of religious salaries.
The purpose of these five amendments is to
- A. help the government operate efficiently.
- B. help people know how to be good citizens.
- C. protect citizens from criminals.
- D. protect citizens from the government.
Correct Answer & Rationale
Correct Answer: D
The five amendments in question primarily aim to safeguard individual rights against potential government overreach. They establish limits on governmental power, ensuring that citizens retain personal freedoms and legal protections. Option A is incorrect as these amendments focus on individual rights rather than government efficiency. Option B misinterprets the primary intent; while good citizenship is important, the amendments do not serve as a guide for civic behavior. Option C is also misleading, as the amendments are designed to protect citizens from government actions, not criminal activities. Thus, the focus remains on limiting government power to ensure personal liberties.
The five amendments in question primarily aim to safeguard individual rights against potential government overreach. They establish limits on governmental power, ensuring that citizens retain personal freedoms and legal protections. Option A is incorrect as these amendments focus on individual rights rather than government efficiency. Option B misinterprets the primary intent; while good citizenship is important, the amendments do not serve as a guide for civic behavior. Option C is also misleading, as the amendments are designed to protect citizens from government actions, not criminal activities. Thus, the focus remains on limiting government power to ensure personal liberties.
What is the most likely reason the St. Louis did not return to Hamburg?
- A. The start of World War II made it too dangerous to travel that far.
- B. Most of the passengers were originally from Belgium, not Germany.
- C. The ship did not have enough fuel after being at sea for so long.
- D. The passengers could have ended up being sent to concentration camps.
Correct Answer & Rationale
Correct Answer: D
The most compelling reason the St. Louis did not return to Hamburg is that the passengers faced the real threat of being sent to concentration camps. As the political climate in Europe shifted dramatically during this period, returning them to Germany would have put their lives in jeopardy. Option A, while recognizing the dangers of wartime travel, does not specifically address the immediate threat to the passengers' safety. Option B is inaccurate; the origin of most passengers does not influence the ship's decision to return. Option C is also incorrect; fuel levels would not have been a primary concern compared to the safety of the passengers.
The most compelling reason the St. Louis did not return to Hamburg is that the passengers faced the real threat of being sent to concentration camps. As the political climate in Europe shifted dramatically during this period, returning them to Germany would have put their lives in jeopardy. Option A, while recognizing the dangers of wartime travel, does not specifically address the immediate threat to the passengers' safety. Option B is inaccurate; the origin of most passengers does not influence the ship's decision to return. Option C is also incorrect; fuel levels would not have been a primary concern compared to the safety of the passengers.