Question 1

Figure 3-2
Brazil's Production Possibilities Frontier  
-Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that

Accepted Answer

A) for Brazil, it is more costly to produce peanuts than it is to produce cashews. 
B) Brazil will produce more peanuts and fewer cashews as time goes by. 
C) Brazil faces a tradeoff between producing peanuts and producing cashews. 
D) Brazil should specialize in producing cashews. 
A) for Brazil, it is more costly to produce peanuts than it is to produce cashews. 
B) Brazil will produce more peanuts and fewer cashews as time goes by. 
C) Brazil faces a tradeoff between producing peanuts and producing cashews. 
D) Brazil should specialize in producing cashews.

Question 2

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month.  
-Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia not produce in 240 hours?

Accepted Answer

A) 250 pounds of ham and 120 pounds of cheese 
B) 200 pounds of ham and 160 pounds of cheese 
C) 160 pounds of ham and 200 pounds of cheese 
D) 100 pounds of ham and 240 pounds of cheese 
A) 250 pounds of ham and 120 pounds of cheese 
B) 200 pounds of ham and 160 pounds of cheese 
C) 160 pounds of ham and 200 pounds of cheese 
D) 100 pounds of ham and 240 pounds of cheese

Question 3

Table 3-35  
-Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

Accepted Answer

A) 2/3 pounds of ham per dozen eggs. 
B) 1 pound of ham per dozen eggs. 
C) 1.4 pounds of ham per dozen eggs. 
D) None of the above are correct. 
A) 2/3 pounds of ham per dozen eggs. 
B) 1 pound of ham per dozen eggs. 
C) 1.4 pounds of ham per dozen eggs. 
D) None of the above are correct.

Question 4

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier    
-Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

Accepted Answer

A) 1/4 hour 
B) 1/3 hour 
C) 3 hours 
D) 4 hours 
A) 1/4 hour 
B) 1/3 hour 
C) 3 hours 
D) 4 hours

Question 5

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
​  
-Refer to Table 3-26. Assume that Japan and Korea each has 2400 hours available. Originally, each country divided its time equally between the production of cars and airplanes. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of cars increased by

Accepted Answer

A) 16. 
B) 40. 
C) 64. 
D) 80. 
A) 16. 
B) 40. 
C) 64. 
D) 80.

Question 6

Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can type 100 words in one minute. Timmy has an absolute advantage and a comparative advantage in editing, while Olivia has an absolute advantage and a comparative advantage in typing.

Accepted Answer

A) True 
 B)False

Question 7

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Accepted Answer

A) Iowa has a comparative advantage in the production of corn. 
B) Iowa has an absolute advantage in the production of corn. 
C) Iowa should import corn from Oklahoma. 
D) Oklahoma should produce just enough corn to satisfy its own residents' demands. 
A) Iowa has a comparative advantage in the production of corn. 
B) Iowa has an absolute advantage in the production of corn. 
C) Iowa should import corn from Oklahoma. 
D) Oklahoma should produce just enough corn to satisfy its own residents' demands.

Question 8

Opportunity cost refers to how many inputs a producer requires to produce a good.

Accepted Answer

A) True 
 B)False

Question 9

Table 3-20
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate.  
-Refer to Table 3-20. Assume that Brad and Theresa each has 60 minutes available. If each person spends all his or her time producing the good in which he or she has a comparative advantage, then total production is

Accepted Answer

A) 6 bushels of wheat and 6 pounds of beef. 
B) 10 bushels of wheat and 5 pounds of beef. 
C) 10 bushels of wheat and 6 pounds of beef. 
D) 6 bushels of wheat and 5 pounds of beef. 
A) 6 bushels of wheat and 6 pounds of beef. 
B) 10 bushels of wheat and 5 pounds of beef. 
C) 10 bushels of wheat and 6 pounds of beef. 
D) 6 bushels of wheat and 5 pounds of beef.

Question 10

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?

Accepted Answer

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

Question 11

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier    
-Refer to Figure 3-10. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade?

Accepted Answer

A) Alice produces more pizzas and Betty produces more lemonade. 
B) Alice produces more lemonade and Betty produces more pizzas. 
C) Both Alice and Betty produce only pizzas. 
D) There are no circumstances under which both Alice and Betty can benefit from specialization and trade. 
A) Alice produces more pizzas and Betty produces more lemonade. 
B) Alice produces more lemonade and Betty produces more pizzas. 
C) Both Alice and Betty produce only pizzas. 
D) There are no circumstances under which both Alice and Betty can benefit from specialization and trade.

Question 12

If he devotes all of his available resources to cantaloupe production, a farmer can produce 120 cantaloupes. If he sacrifices 1.5 watermelons for each cantaloupe that he produces, it follows that

Accepted Answer

A) if he devotes all of his available resources to watermelon production, then he can produce 80 watermelons. 
B) he cannot have a comparative advantage over other farmers in producing cantaloupes. 
C) his opportunity cost of one watermelon is 2/3 of a cantaloupe. 
D) his production possibilities frontier is bowed-out. 
A) if he devotes all of his available resources to watermelon production, then he can produce 80 watermelons. 
B) he cannot have a comparative advantage over other farmers in producing cantaloupes. 
C) his opportunity cost of one watermelon is 2/3 of a cantaloupe. 
D) his production possibilities frontier is bowed-out.

Question 13

Figure 3-13
Peru's Production Possibilities Frontier  
-Refer to Figure 3-13. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision?

Accepted Answer

A) 1/8 emerald 
B) 1/3 emerald 
C) 1 emerald 
D) 3 emeralds 
A) 1/8 emerald 
B) 1/3 emerald 
C) 1 emerald 
D) 3 emeralds

Question 14

Sally can make 8 cups of soup per hour or 20 crackers per hour. Harry can make 10 cups of soup per hour or 30 crackers per hour. Can Sally and Harry gain from trade? If so, what is the range of prices of crackers for soup at which they would both find trade advantageous?

Accepted Answer

Yes. More than 2.5 c

Question 15

Table 3-35  
-Refer to Table 3-35. Denmark's opportunity cost of producing 1dozen eggs is

Accepted Answer

A) 5/4 pounds of ham. This is higher than Finland's opportunity cost of producing 1dozen eggs. 
B) 5/4 pounds of ham. This is lower than Finland's opportunity cost of producing 1 dozen eggs. 
C) 4/5 pounds of ham. This is higher than Finland's opportunity cost of producing 1 dozen eggs. 
D) 4/5 pounds of ham. This is lower than Finland's opportunity cost of producing 1 dozen eggs. 
A) 5/4 pounds of ham. This is higher than Finland's opportunity cost of producing 1dozen eggs. 
B) 5/4 pounds of ham. This is lower than Finland's opportunity cost of producing 1 dozen eggs. 
C) 4/5 pounds of ham. This is higher than Finland's opportunity cost of producing 1 dozen eggs. 
D) 4/5 pounds of ham. This is lower than Finland's opportunity cost of producing 1 dozen eggs.

Question 16

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
​  
-Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?

Accepted Answer

A) 9 airplanes 
B) 15 airplanes 
C) 135 airplanes 
D) 225 airplanes 
A) 9 airplanes 
B) 15 airplanes 
C) 135 airplanes 
D) 225 airplanes

Question 17

A country that currently does not trade with other countries could benefit by

Accepted Answer

A) restricting imports and promoting exports. 
B) promoting imports and restricting exports. 
C) restricting both imports and exports. 
D) not restricting trade. 
A) restricting imports and promoting exports. 
B) promoting imports and restricting exports. 
C) restricting both imports and exports. 
D) not restricting trade.

Question 18

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Accepted Answer

A) True 
 B)False

Question 19

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier    
-Refer to Figure 3-9. If the production possibilities frontiers shown are each for two days of production, then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together make in a given 2-day production period?

Accepted Answer

A) 12 bolts and 120 nails 
B) 24 bolts and 96 nails 
C) 38 bolts and 50 nails 
D) 44 bolts and 24 nails 
A) 12 bolts and 120 nails 
B) 24 bolts and 96 nails 
C) 38 bolts and 50 nails 
D) 44 bolts and 24 nails

Question 20

Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

Accepted Answer

A) Kelly has a comparative advantage in repairing cars and David has a comparative advantage in cooking meals. 
B) Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking meals. 
C) Kelly has a comparative advantage in repairing cars and in cooking meals. 
D) David has an absolute advantage in repairing cars and in cooking meals. 
A) Kelly has a comparative advantage in repairing cars and David has a comparative advantage in cooking meals. 
B) Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking meals. 
C) Kelly has a comparative advantage in repairing cars and in cooking meals. 
D) David has an absolute advantage in repairing cars and in cooking meals.

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that

Table 3-35 -Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

Figure 3-3 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Opportunity cost refers to how many inputs a producer requires to produce a good.

If he devotes all of his available resources to cantaloupe production, a farmer can produce 120 cantaloupes. If he sacrifices 1.5 watermelons for each cantaloupe that he produces, it follows that

Figure 3-13 Peru's Production Possibilities Frontier -Refer to Figure 3-13. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision?

Sally can make 8 cups of soup per hour or 20 crackers per hour. Harry can make 10 cups of soup per hour or 30 crackers per hour. Can Sally and Harry gain from trade? If so, what is the range of prices of crackers for soup at which they would both find trade advantageous?

Table 3-35 -Refer to Table 3-35. Denmark's opportunity cost of producing 1dozen eggs is

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?

A country that currently does not trade with other countries could benefit by

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

Ten Principles of Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Exam 3: Interdependence and the Gains From Trade

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that

Table 3-35 -Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

Figure 3-3 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Opportunity cost refers to how many inputs a producer requires to produce a good.

If he devotes all of his available resources to cantaloupe production, a farmer can produce 120 cantaloupes. If he sacrifices 1.5 watermelons for each cantaloupe that he produces, it follows that

Figure 3-13 Peru's Production Possibilities Frontier -Refer to Figure 3-13. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision?

Sally can make 8 cups of soup per hour or 20 crackers per hour. Harry can make 10 cups of soup per hour or 30 crackers per hour. Can Sally and Harry gain from trade? If so, what is the range of prices of crackers for soup at which they would both find trade advantageous?

Table 3-35 -Refer to Table 3-35. Denmark's opportunity cost of producing 1dozen eggs is

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ -Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?

A country that currently does not trade with other countries could benefit by

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

Ten Principles of Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?