Exam 3: Interdependence and the Gains From Trade

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba each divides her time equally between making bowls and making cups,then total production is

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

By definition,imports are

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba both spend all of their time making bowls,then total production is

Absolute advantage is found by comparing different producers'

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.Suppose Uzbekistan decides to increase its production of bolts by 10.What is the opportunity cost of this decision?

Suppose Hank and Tony can both produce corn.If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans,then Hank has the comparative advantage in the production of corn.

Harry is a computer company executive,earning $200 per hour managing the company and promoting its products.His daughter Quinn is a high school student,earning $6 per hour helping her grandmother on the farm.Harry's computer is broken.He can repair it himself in one hour.Quinn can repair it in 10 hours.Harry's opportunity cost of repairing the computer is lower than Quinn's.

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.Sardi has an absolute advantage in the production of

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.Assume that Hilda and Carlos each has 90 hours available.If each person divides their time equally between the production of quilts and dresses,then total production is

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year,and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.Each nation has 10 workers.For many years the two countries traded,each completely specializing according to their respective comparative advantages.Now,however,war has broken out between them and all trade has stopped.Without trade,Freedonia produces and consumes 30 units of corn and 10 units of wheat per year.Sylvania produces and consumes 10 units of corn and 30 units of wheat.The war has caused the combined yearly output of the two countries to decline by

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.Belgium should specialize in the production of

Figure 3-5 Puneet's Production Possibilities Frontier Chirag's Production Possibilities Frontier -Refer to Figure 3-5.If Puneet and Chirag both spend all of their time making wallets,then total production is

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 pound of pork?

When each person specializes in producing the good in which he or she has a comparative advantage,total production in the economy

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 Jim's production possibilities frontier,based on a 40-hour week?

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.If the production possibilities frontier shown for Juba is for 2 hours of work,then how long does it take Juba to make one bowl?

Suppose the United States has a comparative advantage over Mexico in producing pork.The principle of comparative advantage asserts that

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.Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?