Exam 3: Exchange and Markets

What is the difference between comparative advantage and absolute advantage?

People who develop new products and production processes increase their profitability by taking out ________ on their inventions.

Suppose that in the time it takes for him to bake a cake,Bob can produce 5 pairs of jeans.In the time it takes for Joe to bake a cake,he can produce 8 pairs of jeans.In this example,who has the comparative advantage in baking a cake?

The principles of comparative advantage and specialization apply to trade between countries.

To specify terms of exchange and facilitate exchange between strangers,a(n)________ is often used.

Which of the following is an example of a market failure caused by the existence of a public good?

Markets exist

If Tom can produce 20 multiple choice questions or 30 true/false questions in an hour,and Mary can produce 15 multiple choice questions or 15 true/false questions in an hour,then Mary has a comparative advantage in writing true/false questions.

Table 3.1 -Table 3.1 illustrates Willy and Blythe's hourly production for apples and carrots.From the table,we can conclude that: if Willy and Blythe choose to specialize and trade,then

Suppose Bob can produce more jeans than Joe in a day.Bob has ________ advantage over Joe in producing jeans.

When the government provides its citizens an unemployment insurance program,it is

A public good is any good that is produced by the government.

A rich nation will trade with a poor nation because the