Exam 8: Trade

The following figure illustrates the production possibilities curve for two individuals,Jack and John.Both of them have to divide their available time of 100 hours between writing economics articles and travel articles. Comment on the absolute and comparative advantage of both individuals.

The following figure depicts four different scenarios in which the blue line represents California's production possibilities curve (PPC) and the red line represents Texas' PPC. These two states trade wine and cloth. -Refer to the figure above.In what scenario(s)does California have a comparative advantage in wine?

The curvature of an economy's production possibilities curve represents ________.

Which of the following is an effect of imposing a tariff on an imported good?

Scenario: Jack takes 3 hours to complete a painting and 6 hours to create a sculpture. He has 30 hours of time to spend on both activities. -Refer to the scenario above.Which of the following combinations will lie above Jack's production possibilities curve?

Which of the following statements is true?

Scenario: The following figure shows the demand curve, D, and the supply curve, S, of chairs in Barylia. Barylia is open to free trade. The world price of chairs is $3, and the government of Barylia decides to impose a $1 tariff on the import of chairs. -Refer to the scenario above.Calculate the total surplus after the government imposes a tariff of $1 per unit.

The table below shows the domestic price of a pair of trousers in four countries. -Refer to the table above.If the world price of trousers is $5 per pair,then which of the following statements is true?

Scenario: Yasmin and Zeek are lawyers working at V, W, and X LLP. Yasmin works 48 hours a week, and Zeek also works 48 hours a week. They handle two types of cases, intellectual property (IP) cases and corporate fraud (CF) cases. It takes Yasmin 6 hours to handle each IP case and 4 hours to handle each CF case. Zeek can finish an IP case in 3 hours and a CF case in 6 hours. -Refer to the scenario above.What is Yasmin's opportunity cost of handling an IP case?

Scenario: Yasmin and Zeek are lawyers working at V, W, and X LLP. Yasmin works 48 hours a week, and Zeek also works 48 hours a week. They handle two types of cases, intellectual property (IP) cases and corporate fraud (CF) cases. It takes Yasmin 6 hours to handle each IP case and 4 hours to handle each CF case. Zeek can finish an IP case in 3 hours and a CF case in 6 hours. -Refer to the scenario above.If Yasmin spent all her time on CF cases,how many CF cases can she finish?

What are the determinants of a country's comparative advantage?

List the various arguments against free trade.

Suppose Country A produces 10 chairs and 6 tables using its resources,and Country B produces 12 chairs and 18 tables.Determine the comparative advantage and the absolute advantage that both countries enjoy.

Which of the following can be a source of a country's comparative advantage?

The ability of an individual,firm,or country to produce a certain good at a lower opportunity cost than other producers is referred to as ________.

a)The demand for shoes in Cadbia is given by Qd = 300 − 25P,and the supply of shoes is given by Qs = 100 + 25P.If the world price of shoes is $8,will Cadbia import or export shoes? b)The demand for dark chocolates in Cadbia is given by Qd = 300 − 10P,and the supply of dark chocolates is given by Qs = 100 + 10P.If the world price of dark chocolates is $6,will Cadbia import or export chocolates?

Assume that a machine is used to produce calculators and cell phones.The machine can be used for a maximum of 10 hours.The productivity table of the machine is shown below. a)Draw the production possibilities curve from the information given in the table. b)Calculate the opportunity cost of producing either good.

If an economy is producing on the production possibilities curve,then that economy ________.

Which of the following statements is true?

Scenario: With her available resources, Wendy can produce 20 greeting cards or 10 earrings. Sarah, with the resources she has, can produce 5 greeting cards or 15 earrings. -Refer to the scenario above.What is Wendy's opportunity cost of producing 1 greeting card?