Exam 3: Interdependence and the Gains From Trade

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.Zimbabwe's opportunity cost of one hairbrush is

Suppose Jim and Tom can both produce baseball bats.If Jim's opportunity cost of producing baseball bats is lower than Tom's opportunity cost of producing baseball bats,then

Assume for Namibia that the opportunity cost of each hut is 200 bowls.Which of these pairs of points could be on Namibia's production possibilities frontier?

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Suppose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan.Which of the following combinations of bolts and nails could Azerbaijan then consume,assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

Julia can fix a meal in 1 hour,and her opportunity cost of one hour is $50.Jacque can fix the same kind of meal in 2 hours,and his opportunity cost of one hour is $20.Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

If labor in Mexico is less productive than labor in the United States in all areas of production,

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 a comparative advantage in the production of

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.Assume that Maya and Miguel each has 40 hours available.If each person divides his/her time equally between the production of mixers and toasters,then total production is

Figure 3-7 Bintu’s Production Possibilities Frontier Juba’s Production Possibilities Frontier -Refer to Figure 3-7.If Bintu and Juba both spend all of their time making bowls,then total production is

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

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year,and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.Each nation has 10 workers.For many years the two countries traded,each completely specializing according to their respective comparative advantages.Now,however,war has broken out between them and all trade has stopped.Without trade,Freedonia produces and consumes 30 units of corn and 10 units of wheat per year.Sylvania produces and consumes 10 units of corn and 30 units of wheat.The war has caused the combined yearly output of the two countries to decline by

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Perry should specialize 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 novel for Jordan is

The opportunity cost of an item is

Sally can make 8 cups of soup per hour or 20 crackers per hour.Harry can make 10 cups of soup per hour or 30 crackers per hour.Can Sally and Harry gain from trade? If so,what is the range of prices of crackers for soup at which they would both find trade advantageous?

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 farmer has an absolute advantage in the production of

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

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 Greg's opportunity cost of producing cake? Explain how you derived your answer.

What must be given up to obtain an item is called