Week 2 · Quiz

Week 2 — Quiz · Comparative Advantage & the Gains from Trade

Principles of Microeconomics · ECON 1 Fall 2026 · Prof. Kessler Fictional sample

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 1 · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-02-qti.xml for the Canvas import. Every numeric answer is pre-computed; every comparative-advantage claim is verified.

The questions (human-readable; answer key below)

Q1. A country has an ABSOLUTE advantage in producing a good when it —
A) Has a lower opportunity cost than its trading partner B) Can produce more of that good per unit of resources than its trading partner C) Exports more of that good than it imports D) Has no comparative advantage in anything else

Q2. A producer has a COMPARATIVE advantage in a good when it —
A) Produces more of it than any other producer B) Can produce it with a lower opportunity cost than its trading partner C) Has an absolute advantage in every good D) Imports the good rather than making it

Q3. Country C can produce 8 units of corn OR 4 units of steel per worker-day. What is the opportunity cost of 1 unit of STEEL for Country C?
A) ½ corn B) 2 corn C) 4 corn D) 8 corn

Q4. Country C: 1 worker-day → 8 corn OR 4 steel. Country D: 1 worker-day → 3 corn OR 3 steel. Which statement correctly identifies the comparative advantages?
A) C has comparative advantage in both goods because it produces more of each B) D has comparative advantage in corn; C in steel C) C has comparative advantage in corn; D has comparative advantage in steel D) Neither country has a comparative advantage because D produces equal amounts of both goods

Q5. Using the same table: Country C produces more corn AND more steel per worker-day than Country D. Which statement follows?
A) C has comparative advantage in both goods, so D cannot benefit from trade B) C has absolute advantage in both goods, but trade can still benefit BOTH countries C) D has comparative advantage in both goods D) Countries should trade only when both have absolute advantages

Q6. Country C's opportunity cost of 1 unit of steel is 2 corn; Country D's opportunity cost of 1 unit of steel is 1 corn. Which terms of trade (corn per steel) would make BOTH countries better off?
A) 0.5 corn per steel B) 1.5 corn per steel C) 2.5 corn per steel D) Either 0.5 or 2.5 — the middle never works

Q7. Gains from trade exist between two producers when —
A) One producer has an absolute advantage in every good B) Their opportunity costs are identical C) Their opportunity costs DIFFER (at least one good has a different ratio) D) Both producers can meet all their own needs without trading

Q8. (Select all that apply.) Which of the following are NORMATIVE statements about international trade?
☐ A) Specialization according to comparative advantage raises total output ☑ B) Countries that trade freely ought to compensate workers who lose jobs to imports ☐ C) A tariff on steel raises the domestic price of steel ☑ D) The government should prioritize national self-sufficiency over trade gains ☐ E) Free trade increases total consumer surplus

Q9. (True/False) It is possible for one country to have an absolute advantage in BOTH goods and yet still benefit from trading with its partner. → True

Q10. (Matching) Absolute advantage → Producing more output per unit of resources than a rival; Comparative advantage → Lower opportunity cost of production than a rival; Terms of trade → The exchange ratio at which two producers swap goods; Gains from trade → Both parties end up with more than they could produce alone. (Distractor: "The total output a single producer can achieve without any trading.")

Answer key & feedback (instructor)

Q	Type	Answer	Feedback (the idea)
1	MC	B	Absolute advantage = more output per unit of input (the "who makes more" question).
2	MC	B	Comparative advantage = lower opportunity cost (the "who gives up less" question).
3	MC	B	8 corn ÷ 4 steel = 2 corn per unit of steel (state cost in the other good).
4	MC	C	C's steel costs 2 corn; D's steel costs 1 corn → D cheaper → D has CA in steel. C's corn costs ½ steel; D's corn costs 1 steel → C cheaper → C has CA in corn.
5	MC	B	C has absolute advantage in both; CA in both is mathematically impossible — and trade still benefits both as long as opportunity costs differ.
6	MC	B	Mutually beneficial range: strictly between D's floor (1 corn/steel) and C's ceiling (2 corn/steel). 1.5 falls inside; 0.5 and 2.5 do not.
7	MC	C	Gains require differing opportunity costs. Identical costs → no specialization gain.
8	MA	B, D	"Ought to compensate" and "should prioritize" are value judgments (normative). A, C, E are testable positive claims.
9	TF	True	Absolute advantage in both goods ≠ comparative advantage in both. Trade is driven by comparative advantage, not absolute.
10	Match	as above	Distractor "total output a single producer can achieve" is just output capacity, not any of the four terms.

Quality gate (self-checked): Q3 (8÷4=2 corn per steel) and Q4 opportunity-cost ratios re-computed in Python ✓; terms-of-trade range (1 < ToT < 2) verified ✓; comparative-advantage assignments (C in corn, D in steel) verified ✓. Distractors target the named traps (absolute vs. comparative; inverted ratio; "CA impossible in both"; ToT outside the range). No free numeric entry.

This is the human-readable quiz with its vetted answer key and rationale. The import-ready Classic-QTI version (F-quiz-week-02-qti.xml) ships inside the course's .imscc package — it lands in the Canvas gradebook on import.

~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com