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Exam 3: Interdependence and the Gains From Trade

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Question 61

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Figure 3-3 Arturo’s Production Possibilities Frontier Dina’s Production Possibilities Frontier -Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together not produce in a given day?

A) 200 tacos and 400 burritos
B) 300 tacos and 350 burritos
C) 400 tacos and 300 burritos
D) 600 tacos and 250 burritos

E) B) and C)
F) A) and B)

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Question 62

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Canada and the U.S.both produce wheat and computer software.Canada is said to have the comparative advantage in producing wheat if

A) Canada requires fewer resources than the U.S.to produce a bushel of wheat.
B) the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.
C) the opportunity cost of producing a bushel of wheat is lower for the U.S.than it is for Canada.
D) the U.S.has an absolute advantage over Canada in producing computer software.

E) B) and C)
F) A) and D)

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Question 63

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Table 3-4 -Refer to Table 3-4.Finland's opportunity cost of producing 1 unit of ham is

Suppose a gardener produces both green beans and corn in her garden.If the opportunity cost of one bushel of corn is 3/5 bushel of green beans,then the opportunity cost of 1 bushel of green beans is

Figure 3-6 Maxine’s Production Possibilities Frontier Daisy’s Production Possibilities Frontier -Refer to Figure 3-6.Suppose Daisy decides to increase her production of pies by 6.What is the opportunity cost of this decision?

The only two countries in the world,Alpha and Omega,face the following production possibilities frontiers. Alpha's Production Possibilities Frontier Omega's Production Possibilities Frontier a. Assume that each country decides to use half of its resources in the production of each good.Show these points on the graphs for each country as point A. b. If these countries choose not to trade,what would be the total world production of popcorn and peanuts? c. Now suppose that each country decides to specialize in the good in which each has a comparative advantage.By specializing,what is the total world production of each product now? d. If each country decides to trade 100 units of popcorn for 100 units of peanuts,show on the graphs the gain each country would receive from trade.Label these points B.

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The farmer should specialize in the production of

Absolute advantage is found by comparing different producers'

Some countries win in international trade,while other countries lose.

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Falda's opportunity cost of one bushel of wheat is

In which of the following cases should the United States produce more noodles than it wants for its own use and trade some of those noodles to Italy in exchange for wine?

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Perry has a comparative advantage in the production of

Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.Colombia should specialize in the production of

Tom's opportunity cost of mowing a lawn is 2 loads of laundry.Jen's opportunity cost of mowing a lawn is 1.5 loads of laundry.What is the range of prices for mowing a lawn at which Tom and Jen could both benefit from trade?

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba should export

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7.Suppose Japan decides to increase its production of cars by 45.What is the opportunity cost of this decision?

Figure 3-5 Hosne’s Production Possibilities Frontier Merve’s Production Possibilities Frontier -Refer to Figure 3-5.Hosne has a comparative advantage in the production of

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Assume that Aruba and Iceland each has 80 labor hours available.If each country divides its time equally between the production of coolers and radios,then total production is

International trade may make some individuals in a nation better off,while other individuals are made worse off.

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones.Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate.The following table applies. -Refer to Table 3-10.Juanita's opportunity cost of testing one cellular phone is programming