Exam 3: Interdependence and the Gains From Trade

Trade can make some individuals worse off,even as it makes the country as a whole better off.

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars.Also assume that Germany has an absolute advantage in both fish and cars.If these two countries specialize and trade so as to maximize the benefits of specialization and trade,then

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Which of the following points would not be on Barb's production possibilities frontier,based on a 40-hour week?

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Suppose Aruba decides to increase its production of radios by 10.What is the opportunity cost of this decision?

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 Tinaka's opportunity cost of producing one bushel of corn?

Which of the following is not correct?

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.Bob and Enid would not be able to gain from trade if Enid's opportunity cost of one taco changed to

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 an absolute advantage in the production of

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

Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.The opportunity cost of 1 dress for Hilda is

Canada and the U.S.both produce wheat and computer software.Canada is said to have the comparative advantage in producing wheat if

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

Trade between countries

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.Bintu has an absolute advantage in the production of

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.If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese,then England will consume

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.Without trade,Bob produced and consumed 240 tacos and 120 burritos and Enid produced and consumed 100 tacos and 150 burritos.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 260 tacos for 156 burritos.As a result,Bob gained

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 3-10 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 Shantala's production possibilities frontier,based on a 40-hour week?

Trade allows a country to consume outside its production possibilities frontier.

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba should specialize in the production of