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
Which basic principle of governance in the U.S. maintains that legislatures write the laws, executives carry out the laws, and courts interpret the laws?
- A. Federalism
- B. Limited government
- C. Separation of powers
- D. Popular sovereignty
Correct Answer & Rationale
Correct Answer: C
The principle of governance that ensures legislatures write laws, executives enforce them, and courts interpret them is known as the Separation of Powers. This framework prevents any one branch from becoming too powerful, promoting a system of checks and balances essential for democracy. Option A, Federalism, refers to the division of power between national and state governments, not the roles of branches. Option B, Limited Government, emphasizes restrictions on government power but does not specifically address the functions of branches. Option D, Popular Sovereignty, focuses on the authority of the people in governance, rather than the separation of government functions.
The principle of governance that ensures legislatures write laws, executives enforce them, and courts interpret them is known as the Separation of Powers. This framework prevents any one branch from becoming too powerful, promoting a system of checks and balances essential for democracy. Option A, Federalism, refers to the division of power between national and state governments, not the roles of branches. Option B, Limited Government, emphasizes restrictions on government power but does not specifically address the functions of branches. Option D, Popular Sovereignty, focuses on the authority of the people in governance, rather than the separation of government functions.
Which amendment has been interpreted to mean that a police officer must get permission from the courts before entering the home of a suspected criminal?
- A. Amendment 1
- B. Amendment 4
- C. Amendment 5
- D. Amendment 6
Correct Answer & Rationale
Correct Answer: B
The Fourth Amendment protects citizens from unreasonable searches and seizures, requiring law enforcement to obtain a warrant based on probable cause before entering a home. This ensures privacy and security within one’s dwelling. Option A, the First Amendment, focuses on freedoms of speech, religion, and assembly, not search and seizure. Option C, the Fifth Amendment, addresses rights related to self-incrimination and due process, while Option D, the Sixth Amendment, guarantees the right to a fair trial and legal counsel. None of these amendments pertain to the requirement for police to obtain permission to enter a home.
The Fourth Amendment protects citizens from unreasonable searches and seizures, requiring law enforcement to obtain a warrant based on probable cause before entering a home. This ensures privacy and security within one’s dwelling. Option A, the First Amendment, focuses on freedoms of speech, religion, and assembly, not search and seizure. Option C, the Fifth Amendment, addresses rights related to self-incrimination and due process, while Option D, the Sixth Amendment, guarantees the right to a fair trial and legal counsel. None of these amendments pertain to the requirement for police to obtain permission to enter a home.
The following is a list of events related to the passage. I. Hitler appointed chancellor II. Immigration and Naturalization Act enacted III. World War II began IV. Germany annexed Austria Place these events in chronological order, from earliest to latest.
- A. I, IV, III, II
- B. II, I, IV, III
- C. III, II, I, IV
- D. IV, III, II, I
Correct Answer & Rationale
Correct Answer: B
Option B presents the events in the correct chronological order. The Immigration and Naturalization Act was enacted first in 1924. Following that, Hitler was appointed chancellor of Germany in 1933. Next, Germany annexed Austria in 1938, leading up to the outbreak of World War II in 1939. Option A incorrectly places the Immigration and Naturalization Act after the others. Option C misplaces the events by starting with World War II, which occurred last. Option D also lists events out of order, starting with the annexation of Austria before the appointment of Hitler and the war. Understanding the timeline is crucial for grasping the historical context.
Option B presents the events in the correct chronological order. The Immigration and Naturalization Act was enacted first in 1924. Following that, Hitler was appointed chancellor of Germany in 1933. Next, Germany annexed Austria in 1938, leading up to the outbreak of World War II in 1939. Option A incorrectly places the Immigration and Naturalization Act after the others. Option C misplaces the events by starting with World War II, which occurred last. Option D also lists events out of order, starting with the annexation of Austria before the appointment of Hitler and the war. Understanding the timeline is crucial for grasping the historical context.
According to Cartoon 2, how were American laborers affected by foreign laborers?
- A. A larger supply of labor tends to drive down wages.
- B. A growing population tends to raise the cost of living.
- C. A growing demand for jobs tends to increase productivity.
- D. A larger labor market tends to provide better job opportunities.
Correct Answer & Rationale
Correct Answer: A
American laborers faced wage reductions due to the influx of foreign laborers, as indicated in Cartoon 2. A larger supply of labor typically leads to increased competition for jobs, resulting in lower wages for workers. Option B incorrectly suggests that a growing population raises living costs; while this can be true, it does not directly address the impact of foreign labor on American workers' wages. Option C focuses on job demand increasing productivity, which is unrelated to the effects of foreign labor on wages. Option D claims a larger labor market provides better job opportunities, but this overlooks the wage suppression effect highlighted in the cartoon.
American laborers faced wage reductions due to the influx of foreign laborers, as indicated in Cartoon 2. A larger supply of labor typically leads to increased competition for jobs, resulting in lower wages for workers. Option B incorrectly suggests that a growing population raises living costs; while this can be true, it does not directly address the impact of foreign labor on American workers' wages. Option C focuses on job demand increasing productivity, which is unrelated to the effects of foreign labor on wages. Option D claims a larger labor market provides better job opportunities, but this overlooks the wage suppression effect highlighted in the cartoon.