Exam 3: Interdependence and the Gains From Trade

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is

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

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 Andia's opportunity cost of producing one pound of beef?

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

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.We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea.If we were to do this,measuring cars along the horizontal axis,then

Unless two people who are producing two goods have exactly the same opportunity costs,then one person will have a comparative advantage in one good,and the other person will have a comparative advantage in the other good.

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year,and a worker in Teeveeland can produce either 2 radios or 4 televisions per year.Each nation has 100 workers.Also suppose that each country completely specializes in producing the good in which it has a comparative advantage.If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year,then each country's maximum consumption of new radios and televisions per year will be

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year.Each nation has 100 workers,and each country specializes according to the principle of comparative advantage.If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year,then each country's maximum consumption of new radios and televisions per year will be

When an economist points out that you and millions of other people are interdependent,he or she is referring to the fact that we all

Table 3-3 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-3.At which of the following prices,if any,can India and Indonesia both gain from trade?

Suppose Susan can wash three windows per hour or she can iron six shirts per hour.Paul can wash two windows per hour or he can iron five shirts per hour.

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.The opportunity cost of 1 pound of potatoes for the farmer is

Table 3-4 -Refer to Table 3-4.Which good(s)does Finland have an absolute advantage producing?

Both Bill and Mary produce t-shirts and hats.If Bill's opportunity cost of 1 t-shirt is 4 hats and Mary's opportunity cost of 1 t-shirt is 3 hats,then

Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts.Also suppose the US has an absolute advantage in the production of both semiconductors and auto parts.The US should

Figure 3-3 Arturo’s Production Possibilities FrontierFrontier Dina’s Production Possibilities -Refer to Figure 3-3.Arturo has an absolute advantage in the production of

Comparative advantage is related most closely to which of the following?

Adam Smith developed the theory of comparative advantage as we know it today.

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?