Exam 3: Interdependence and the Gains From Trade

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for 40 hours of production,then how long does it take Peru to make one emerald?

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.If Bob and Enid each divides their time equally between the production of tacos and burritos,then total production is

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.Without trade,Uzbekistan produced and consumed 12 bolts and 36 nails and Azerbaijan produced and consumed 14 bolts and 24 nails.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 16 bolts for 38 nails.As a result,Uzbekistan gained

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.Juanita has an absolute advantage in

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage,then total production will increase by

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.We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain.If we were to do this,measuring cheese along the horizontal axis,then

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.Assume that Zimbabwe and Portugal each has 60 machine minutes available.Originally,each country divided its time equally between the production of toothbrushes and hairbrushes.Now,each country spends all its time producing the good in which it has a comparative advantage.As a result,the total output increased by

If Shawn can produce more donuts in one day than Sue can produce in one day,then

Table 3-8 Assume that Kito and Penda can switch between producing baskets and producing birdhouses at a constant rate. -Refer to Table 3-8.Assume that Kito and Penda each has 24 labor hours available.If each person divides their time equally between the production of baskets and birdhouses,then total production is

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7.Korea should specialize in the production of

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.Belgium's opportunity cost of one waffle is

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7.Assume that Japan and Korea each has 2400 hours available.Originally,each country divided its time equally between the production of cars and airplanes.Now,each country spends all its time producing the good in which it has a comparative advantage.As a result,the total output of cars increased by

The only two countries in the world,Alpha and Omega,face the following production possibilities frontiers. Alpha's Production Possibilities Frontier Omega's Production Possibilities Frontier a. Assume that each country decides to use half of its resources in the production of each good.Show these points on the graphs for each country as point A. b. If these countries choose not to trade,what would be the total world production of popcorn and peanuts? c. Now suppose that each country decides to specialize in the good in which each has a comparative advantage.By specializing,what is the total world production of each product now? d. If each country decides to trade 100 units of popcorn for 100 units of peanuts,show on the graphs the gain each country would receive from trade.Label these points B.

Suppose that a worker in Agland can produce either 10 units of organic grain or 2 units of incense per year,and a worker in Zenland can produce either 5 units of organic grain or 15 units of incense per year.There are 20 workers in Agland and 10 workers in Zenland.Currently the two countries do not trade.Agland produces and consumes 100 units of grain and 20 units of incense per year.Zenland produces and consumes 50 units of grain and no incense per year.If each country made the decision to specialize in producing the good in which it has a comparative advantage,then the combined yearly output of the two countries would increase by

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Falda has a comparative advantage in the production of

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together not make in a given 4-hour production period?

A production possibilities frontier is a straight line when

Figure 3-1 Panel (a)Panel (b) -Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches depends on how many chairs and couches are being produced in

Refer to Table 3-2.Iceland should export

Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week.Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week.Zora has the comparative advantage in quilts and the absolute advantage in neither good,while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods.