Exam 3: Interdependence and the Gains From Trade

Scenario 3-1.Ice cream and cake. The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time. -Refer to Scenario 3-1.What is Catherine's opportunity cost of producing cake? Explain how you derived your answer.

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 an absolute advantage in the production of

Charlotte can produce pork and beans and can switch between producing them at a constant rate.If it takes her 10 hours to produce a pound of pork and 5 hours to produce a pound of beans,what is her opportunity cost of pork and what is her opportunity cost of beans?

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.England has an absolute advantage in the production of

Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

The principle of comparative advantage does not provide answers to certain questions.One of those questions is

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 and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

Ellie and Brendan both produce apple pies and vanilla ice cream.If Ellie's opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan's opportunity cost of one apple pie is 1/4 gallon of ice cream,a mutually advantageous trade can be struck at a price of one apple pie for 1/3 gallon of ice cream.

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.At which of the following prices would both Andia and Zardia gain from trade with each other?

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Which of the following is not correct?

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Varick has an absolute advantage in the production of

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.For Bonovia,what is the opportunity cost of a pound of cheese?

A farmer has the ability to grow either corn or cotton or some combination of the two.Given no other information,it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

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 rancher not produce in 24 hours?

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.Portugal has an absolute advantage in the production of

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.Assume that Andia and Zardia each has 60 minutes available.If each person spends all his time producing the good in which he has a comparative advantage,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.Miguel has an absolute advantage in the production of

Figure 3-3 Arturo’s Production Possibilities FrontierFrontier Dina’s Production Possibilities -Refer to Figure 3-3.Which of the following is not correct?

Figure 3-2 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. -Refer to figure 3-2.Bob has