Exam 3: Interdependence and the Gains From Trade

Figure 3-13 Peru's Production Possibilities Frontier -Refer to Figure 3-13. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision?

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

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

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The opportunity cost of 1 pound of pork for the farmer is

Table 3-2 Assume that England and Holland can switch between producing milk and oats at a constant rate. -Refer to Table 3-2. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Holland. If we were to do this, measuring milk along the horizontal axis, then

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?

Specialization and trade are closely linked to

Table 3-31 -Refer to Table 3-31. For the farmer, the opportunity cost of 15 pounds of meat is

Economists generally support

A production possibilities frontier is a straight line when

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. Brad has an absolute advantage in the production of

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Suppose Arturo is willing to trade 6 burritos to Dina for each 10 tacos that Dina produces and sends to Arturo. Which of the following combinations of tacos and burritos could Dina then consume, assuming Dina specializes in taco production and Arturo specializes in burrito production?

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-24. The opportunity cost of 1 unit of bread for England is

Opportunity cost measures the trade-off between two goods that each producer faces.

Table 3-35 -Refer to Table 3-35. Finland's opportunity cost of producing 1 unit of ham is

Mark can produce 24 footballs or 48 basketballs in 8 hours. Maria can produce 64 basketballs in 8 hours. In order for Maria to have a comparative advantage producing basketballs, the number of footballs she can produce in 8 hours has to be less than .

Figure 3-8 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of pounds of coffee and pounds of soybeans could Chile and Colombia together not make in a given day?

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Suppose Uzbekistan decides to increase its production of bolts by 10. What is the opportunity cost of this decision?

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-24. England has an absolute advantage in the production of