Exam 3: Interdependence and the Gains From Trade

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. What is Kate's opportunity cost of one cookie?

What does a consumption possibilities frontier represent?

Which famous economist developed the principle of comparative advantage as we know it today?

Trade allows all countries to achieve greater prosperity.

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. Who has a comparative advantage in making cookies?

Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Suppose Azerbaijan decides to increase its production of nails by 20. What is the opportunity cost of this decision?

Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour.

Figure 3-23 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 3-23. For Bonovia, what is the opportunity cost of a pound of cheese?

David Ricardo was the author of the 1817 book Principles of Political Economy and Taxation.

Table 3-41 ​ ​ -Refer to Table 3-41. What is England's opportunity cost of one compass?

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

Table 3-37 ​ -​Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Suppose that Sarah and Charles produce for two 6-hour sessions and they split this time equally between the production of vases and mugs. If they then produce for two 6-hour sessions and produce only the good that each person has the comparative advantage for, then total production of

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. If Canada and Mexico switch from each country dividing its time equally between the production of Good X and Good Y to each country spending all of its time producing the good in which it has a comparative advantage, then total production of Good X will increase by

Economists generally support

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. If each country spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 cars for 6 airplanes, then

Economists use the term ______ to refer to the ability to produce a good using fewer inputs than another producer.

Table 3-4 Assume that Andrea and Paul can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-4. Assume that Andrea and Paul each has 480 minutes available. If each person divides his time equally between the production of wheat and beef, then total production is

Table 3-21 Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. -Refer to Table 3-21. Assume that Jamaica and Norway each has 4 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of radios increased by

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. ​ -Refer to Table 3-27. The opportunity cost of 1 parasol for Min is