Exam 3: Interdependence and the Gains From Trade

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The opportunity cost of 1 pound of meat for the farmer is

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

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

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.

In most countries today,many goods and services consumed are imported from abroad,and many goods and services produced are exported to foreign customers.

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.Which of the following combinations of cheese and bread could England not produce in 40 hours?

Adam Smith developed the theory of comparative advantage as we know it today.

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.England has a comparative advantage in the production of

Table 3-1 Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate. -Refer to Table 3-1.What is Sardi's opportunity cost of producing one pound of pork?

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Portugal has an absolute advantage in the production of

Figure 3-5 Puneet's Production Possibilities Frontier Chirag's Production Possibilities Frontier -Refer to Figure 3-5.Puneet has a comparative advantage in the production of

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones.Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate.The following table applies. -Refer to Table 3-10.Which of the following points would be on Juanita's production possibilities frontier,based on a 40-hour week?

Two individuals engage in the same two productive activities.In which of the following circumstances would neither individual have a comparative advantage in either activity?

Table 3-1 Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate. -Refer to Table 3-1.Which of the following combinations of corn and pork could Sardi produce in one 8-hour day?

Unless two people who are producing two goods have exactly the same opportunity costs,then one person will have a comparative advantage in one good,and the other person will have a comparative advantage in the other good.

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes?

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

The following table contains some production possibilities for an economy for a given month. If the production possibilities frontier is bowed outward,then "?" could be

The following table contains some production possibilities for an economy for a given year. If the production possibilities frontier is a straight line,then "?" must be