Exam 3: Interdependence and the Gains From Trade

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.The opportunity cost of 1 basket for Kito is

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.Suppose Peru decides to increase its production of emeralds by 2.What is the opportunity cost of this decision?

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 bolts for 36 nails,then

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

The principle of comparative advantage does not provide answers to certain questions.One of those questions is

Which of the following is not a reason people choose to depend on others for goods and services?

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.Suppose Daisy decides to increase her production of pies by 6.What is the opportunity cost of this decision?

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.If the production possibilities frontiers shown are each for two days of production,then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together not make in a given 2-day production period?

Differences in opportunity cost allow for gains from trade.

If one producer is able to produce a good at a lower opportunity cost than some other producer,then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

Trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage.

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.Belgium and Latvia would not be able to gain from trade if Latvia's opportunity cost of one pancake changed to

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.Suppose Juba is willing to trade one bowl to Bintu for every two cups that Bintu makes and sends to Juba.Which of the following combinations of bowls and cups could Bintu then consume,assuming Bintu specializes in making cups and Juba specializes in making bowls?

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 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.If the production possibilities frontier shown for Chirag is for 8 hours of work,then how long does it take Chirag to make one purse?

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.The opportunity cost of 1 novel for Perry is

Figure 3-5 Puneet's Production Possibilities Frontier Chirag's Production Possibilities Frontier -Refer to Figure 3-5.Puneet's opportunity cost of one wallet is

Figure 3-5 Puneet's Production Possibilities Frontier Chirag's Production Possibilities Frontier -Refer to Figure 3-5.Chirag should specialize in the production of

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks.Which of the following is not possible?

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.The opportunity cost of 1 birdhouse for Kito is