Exam 3: Interdependence and the Gains From Trade

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.Chile has a comparative advantage in the production of

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 table is

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Jordan should specialize in the production of

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. Alice’s Production Possibilities Frontier Frontier Betty’s Production Possibilities -Refer to Figure 3-10.If Alice produces only lemonade,she can produce

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. Alice’s Production Possibilities Frontier Betty’s Production Possibilities Frontier -Refer to Figure 3-10.Which of the following statements is correct regarding absolute advantage?

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

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

If the U.S.could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor,would it necessarily follow that the U.S.should specialize in television production? Explain your answer using the concepts of comparative and or absolute advantage.

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

As a student,Anne spends 40 hours per week writing term papers and completing homework assignments.On one axis of her production possibilities frontier is measured the number of term papers written per week.On the other axis is measured the number of homework assignments completed per week.Anne's production possibilities frontier is a straight line if

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 meat for the farmer is

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan both spend all of their time writing poems,then total production is

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.If the production possibilities frontiers shown are each for one year of writing,then which of the following combinations of novels and poems could Perry and Jordan together not write in a given year?

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.Without trade,England produced and consumed 32 units of cheese and 2 units of bread and Spain produced and consumed 6 units of cheese and 2 units of bread.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread.As a result,England gained

In an economy consisting of two people producing two goods,it is possible for one person to have the absolute advantage and the comparative advantage in both goods.

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Frontier Azerbaijan’s Production Possibilities -Refer to Figure 3-9.If the production possibilities frontiers shown are each for two days of production,then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together make in a given 2-day production period?

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.Falda has an absolute advantage in the production of

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

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.