Exam 3: Interdependence and the Gains From Trade

It takes Ross 6 hours to produce a bushel of corn and 2 hours to wash and polish a car.It takes Courtney 6 hours to produce a bushel of corn and 1 hour to wash and polish a car.Courtney and Ross cannot gain from specialization and trade,since it takes each of them 6 hours to produce 1 bushel of corn.

In most countries today,many goods and services consumed are imported from abroad,and many goods and services produced are exported to foreign customers.

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones.Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate.The following table applies. -Refer to Table 3-10.Which of the following points would be on Shantala's production possibilities frontier,based on a 40-hour week?

Differences in opportunity cost allow for gains from trade.

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?

Table 3-12 -Refer to Table 3-12.Assume that the farmer and the rancher each has 40 labor hours available.If each person divides his time equally between the production of meat and potatoes,then total production is

An economy's production possibilities frontier is also its consumption possibilities frontier

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba has a comparative advantage in the production of

When there are two people and each is capable of producing two goods,it is possible for one person to have a comparative advantage over the other in both goods.

Table 3-12 -Refer to Table 3-1.For the rancher,the opportunity cost of 1 pound of meat is

If one producer has the absolute advantage in the production of all goods,then that same producer will have the comparative advantage in the production of all goods as well.

Figure 3-6 Maxine’s Production Possibilities Frontier Daisy’s Production Possibilities Frontier -Refer to Figure 3-6.Maxine has an absolute advantage in the production of

When describing the opportunity cost of two producers,economists use the term

Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.If Chile and Colombia switch from each country dividing its time equally between the production of coffee and soybeans to each country spending all of its time producing the good in which it has a comparative advantage,then total production of soybeans will increase by

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Assume that Zimbabwe and Portugal each has 180 machine minutes available.If each country divides its time equally between the production of toothbrushes and hairbrushes,then total production is

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.At which of the following prices would both Maya and Miguel gain from trade with each other?

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.Which of the following combinations of wheat and beef could Zardia not produce in one 10-hour day?

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth.Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

Economists generally support

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.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if