Exam 3: Interdependence and the Gains From Trade

Suppose Jim and Tom can both produce baseball bats.If Jim's opportunity cost of producing baseball bats is lower than Tom's opportunity cost of producing baseball bats,then

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.Suppose Japan decides to increase its production of cars by 45.What is the opportunity cost of this decision?

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.Assume that England and Spain each has 40 labor hours available.If each country divides its time equally between the production of cheese and bread,then total production is

A country that currently does not trade with other countries could benefit by

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.Latvia should specialize 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.The opportunity cost of 1 quilt for Hilda is

Trade can make everybody better off because it

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.Belgium has a comparative advantage in the production of

Assume for the United States that the opportunity cost of each airplane is 100 cars.Then which of these pairs of points could be on the United States' production possibilities frontier?

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

Refer to Table 3-2.At which of the following prices would both Aruba and Iceland gain from trade with each other?

Refer to Table 3-2.Aruba should export

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy.Which of the following combinations of pies and tarts could Maxine not then consume,assuming Maxine specializes in making pies and Daisy specializes in making tarts?

Trade allows all countries to achieve greater prosperity.

It is possible for the U.S.to gain from trade with Germany even if it takes U.S.workers fewer hours to produce every good than it takes German workers.

If a person chooses self-sufficiency,then she can only consume what she produces.

Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day,and a worker in Felinia can produce either 5 blankets or 1 meal per day.Each nation has 10 workers.For many years,the two countries traded,each completely specializing according to their respective comparative advantages.Now war has broken out between them and all trade has stopped.Without trade,Caninia produces and consumes 10 blankets and 40 meals per day and Felinia produces and consumes 25 blankets and 5 meals per day.The war has caused the combined daily output of the two countries to decline by

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier -Refer to Figure 3-8.If Belgium and Latvia each divides its time equally between making waffles and making pancakes,then total production is

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each spends all their time producing the good in which they have a comparative advantage and trade takes place at a price of 1 novel for 7 poems,then

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.Which of the following combinations of quilts and dresses could Carlos not produce in 90 hours?