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 Toland, what is the opportunity cost of one unit of timber?
- A. ½ unit of fish
- B. 5 units of fish
- C. ½ unit of timber
- D. 16 units of timber
Correct Answer & Rationale
Correct Answer: A
In Toland, the opportunity cost of one unit of timber is measured in terms of the fish that could have been produced instead. Option A, ½ unit of fish, accurately reflects this trade-off, indicating that producing one additional unit of timber sacrifices half a unit of fish. Option B, 5 units of fish, overestimates the opportunity cost, suggesting an unrealistic trade-off that does not align with the production possibilities. Option C, ½ unit of timber, incorrectly implies that timber production is sacrificed for itself, which is illogical. Lastly, Option D, 16 units of timber, misrepresents the concept of opportunity cost, as it suggests sacrificing timber for more timber, which is not feasible.
In Toland, the opportunity cost of one unit of timber is measured in terms of the fish that could have been produced instead. Option A, ½ unit of fish, accurately reflects this trade-off, indicating that producing one additional unit of timber sacrifices half a unit of fish. Option B, 5 units of fish, overestimates the opportunity cost, suggesting an unrealistic trade-off that does not align with the production possibilities. Option C, ½ unit of timber, incorrectly implies that timber production is sacrificed for itself, which is illogical. Lastly, Option D, 16 units of timber, misrepresents the concept of opportunity cost, as it suggests sacrificing timber for more timber, which is not feasible.
Other Related Questions
What was the impact of the Brandenburg v. Ohio ruling on an individual's right to freedom of speech?
- A. It allowed for more freedom.
- B. It created further restrictions.
- C. It had no effect on free speech issues.
- D. It created a special class of speech regarding racial issues.
Correct Answer & Rationale
Correct Answer: A
The Brandenburg v. Ohio ruling significantly expanded individual rights to freedom of speech by establishing the "imminent lawless action" standard. This meant that speech could only be restricted if it incited immediate illegal activity, thereby allowing for more robust expression of ideas, even controversial ones. Option B is incorrect as the ruling lessened restrictions on speech rather than increasing them. Option C misrepresents the ruling's significance; it directly influenced free speech protections. Option D is also inaccurate, as the ruling did not create a special class of speech but rather reinforced protections for all forms of expression.
The Brandenburg v. Ohio ruling significantly expanded individual rights to freedom of speech by establishing the "imminent lawless action" standard. This meant that speech could only be restricted if it incited immediate illegal activity, thereby allowing for more robust expression of ideas, even controversial ones. Option B is incorrect as the ruling lessened restrictions on speech rather than increasing them. Option C misrepresents the ruling's significance; it directly influenced free speech protections. Option D is also inaccurate, as the ruling did not create a special class of speech but rather reinforced protections for all forms of expression.
In Cartoon 2, the two-faced figure attempts to convince American laborers to support tariffs by appealing to their
- A. fear that foreign workers would work for lower wages.
- B. desire to prove that American-made products were superior to products made by foreign workers.
- C. fear that foreign workers would bring radical political ideas.
- D. desire to share the American standard of living with foreign workers.
Correct Answer & Rationale
Correct Answer: A
The two-faced figure in Cartoon 2 appeals to American laborers' fear that foreign workers would work for lower wages, which threatens their job security and income. This fear is a powerful motivator for supporting tariffs, as it aims to protect domestic jobs from cheaper foreign labor. Option B, while highlighting a desire for quality, does not directly address the immediate economic concern of job security. Option C introduces a political fear, but the cartoon focuses more on economic implications. Option D suggests a sense of altruism, which contrasts with the self-interest driving laborers' decisions regarding tariffs.
The two-faced figure in Cartoon 2 appeals to American laborers' fear that foreign workers would work for lower wages, which threatens their job security and income. This fear is a powerful motivator for supporting tariffs, as it aims to protect domestic jobs from cheaper foreign labor. Option B, while highlighting a desire for quality, does not directly address the immediate economic concern of job security. Option C introduces a political fear, but the cartoon focuses more on economic implications. Option D suggests a sense of altruism, which contrasts with the self-interest driving laborers' decisions regarding tariffs.
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.
Which statement best describes a key aspect of the trade relationship between Grand Coast and Toland?
- A. Grand Coast has the advantage in both timber and fish.
- B. Toland has the comparative advantage in fish.
- C. Toland can produce timber at a lower opportunity cost than Grand Coast.
- D. Grand Coast can produce fish at a lower opportunity cost than Toland.
Correct Answer & Rationale
Correct Answer: D
In the context of trade relationships, opportunity cost is crucial. Grand Coast can produce fish at a lower opportunity cost than Toland, meaning it sacrifices less in terms of other goods when producing fish. This advantage allows Grand Coast to specialize in fish production, leading to more efficient trade. Option A is incorrect as it suggests Grand Coast has the advantage in both timber and fish, which is unlikely in a comparative advantage scenario. Option B misstates the comparative advantage, assigning it to Toland for fish, which contradicts the opportunity cost analysis. Option C incorrectly asserts that Toland has a lower opportunity cost for timber, which is not supported by the information provided.
In the context of trade relationships, opportunity cost is crucial. Grand Coast can produce fish at a lower opportunity cost than Toland, meaning it sacrifices less in terms of other goods when producing fish. This advantage allows Grand Coast to specialize in fish production, leading to more efficient trade. Option A is incorrect as it suggests Grand Coast has the advantage in both timber and fish, which is unlikely in a comparative advantage scenario. Option B misstates the comparative advantage, assigning it to Toland for fish, which contradicts the opportunity cost analysis. Option C incorrectly asserts that Toland has a lower opportunity cost for timber, which is not supported by the information provided.