Exam 3: The Economic Problem

Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country? i. It enjoys gains from trade. ii. It must have an absolute advantage in the production of the good it produces. iii. It is producing at a point beyond its PPF.

In terms of a nation's production possibilities frontier, what impact does international trade have?

Having a comparative advantage means a nation can

The opportunity cost of economic growth is

If the production possibilities frontier between two goods is a straight line, then the

Moving along the production possibilities frontier itself illustrates

The saying "There's no such thing as a free lunch," applies

Which of the following best describes comparative advantage?

-In the above figure, Jack's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above, Liz ________ benefit from trade with Joe because ________.

Production efficiency is represented by ________ a production possibilities frontier.

Possibility Robots Pizza A 0 40 B 1 39 C 2 37 D 3 34 E 4 30 F 5 20 G 6 0 -The table above shows a nation's production possibilities frontier. The opportunity cost of a robot between combination D and E is

Economic growth depends upon which of the following? I. Improving the quality of labor Ii. Technological advancement Iii. Increasing the amount of capital