Exam 3: Interdependence and the Gains From Trade

Table 3-12 -Refer to Table 3-1.In 10 hours,

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

The most obvious benefit of specialization and trade is that they allow us to

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 coffee and soybeans could Chile and Colombia together make in a given day?

Total output in an economy increases when each person specializes because

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.Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

The production possibilities frontier illustrates

If a country has a lower opportunity cost than its potential trading partner,the country should decide to be self-sufficient.

Kelly and David are both capable of repairing cars and cooking meals.Which of the following scenarios is not possible?

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Suppose Perry is willing to trade 4 poems to Jordan for each novel that Jordan writes and sends to Perry.Which of the following combinations of novels and poems could Jordan then consume,assuming Jordan specializes in novel production and Perry specializes in poem production?

Figure 3-5 Hosne’s Production Possibilities Frontier Merve’s Production Possibilities Frontier -Refer to Figure 3-5.If Hosne must work 0.5 hour to make each purse,then her production possibilities frontier is based on how many hours of work?

Table 3-18 Chris and Tony's Production Opportunities -Adam Smith

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.What is Zardia's opportunity cost of producing one pound of beef?

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds)that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.If the production possibilities frontier shown is for 240 hours of production,then which of the following combinations of ham and cheese could Bonovia not produce in 240 hours?

Trade allows all countries to achieve greater prosperity.

For a country producing two goods,the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

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 Korea decides to increase its production of cars by 18.What is the opportunity cost of this decision?

Table 3-12 -Refer to Table 3-12.Which of the following combinations of meat and potatoes could the rancher not produce in 40 hours?

Scenario 3.2.Countries A and B. In country A a worker who works 40 hours can produce 200 pounds of rice or 100 pounds of broccoli.In country B a worker who works 40 hours can produce 160 pounds of rice or 120 pounds of broccoli. -Refer to Scenario 3-2.Which country,if either,has a comparative advantage producing broccoli? Defend your answer using the numbers given.

Table 3-3 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-3.For which good(s)does Indonesia have a comparative advantage