Exam 2: The Power of Trade and Comparative

Use the following to answer questions: Table: Production Possibilities for Italy and Belgium Labor Hours Needed to Make One Pound of: Pounds produced in 40 hours: Linen Pasta Linen Pasta Italy 10 4 4 10 Belgium 2 8 20 5 -(Table: Production Possibilities for Italy and Belgium) According to the table on production possibilities for Italy and Belgium, Belgium should specialize in linen production because it:

Use the following to answer questions: Table: Production Possibilities for Italy and Belgium Labor Hours Needed to Make One Pound of: Pounds produced in 40 hours: Linen Pasta Linen Pasta Italy 10 4 4 10 Belgium 2 8 20 5 -(Table: Production Possibilities for Italy and Belgium) According to the table on production possibilities for Italy and Belgium, the opportunity cost of 1 pound of linen for Belgium is:

Use the following to answer questions: Table: Movies and Oil Movies/Year Barrels of Oil/Year (millions) Texas 75 50 California 60 30 New York 20 5 -(Table: Movies and Oil) According to the table, which state has the comparative advantage in oil?

The recent pace of globalization has been increased through:

A country has an absolute advantage in production if:

To benefit from trade, a country must have the absolute advantage in producing its traded good.

High-productivity workers fear trade because they think they cannot compete with workers in low-productivity countries. Low-productivity workers fear trade because they think they cannot compete with workers in high-productivity countries. Which of these fears is justified?

Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. If France can trade only with Sweden, then the theory of comparative advantage suggests that:

On a production possibilities frontier a trade-off can be illustrated as:

The concept of comparative advantage implies that:

In Narnia, one binky can be produced with two workers and one sippy cup can be produced with 0.25 workers. In Bedrock, one binky can be produced with one worker and one sippy cup can be produced with 0.50 workers. a. What is the opportunity cost of producing one sippy cup in Narnia and in Bedrock? b. Which country has the comparative advantage in sippy cups? c. Suppose that each country has 100 workers and completely specializes in its comparative advantage. How many units of output of sippy cups and binkys will each country produce? d. Before trade, Narnia produces 25 binkys and 200 sippy cups, and Bedrock produces 50 binkys and 100 sippy cups. Show how specialization and free trade can make each country better off than it was before the trade situation.

Use the following to answer questions: Figure: Sofas and Windows -(Figure: Sofas and Windows) In the PPF diagram, what is the opportunity cost of producing an additional window?

If the goal of education were solely to support economic growth, the ideal graduate would be a:

Use the following to answer questions: Table: Production Possibilities for Italy and Belgium Labor Hours Needed to Make One Pound of: Pounds produced in 40 hours: Linen Pasta Linen Pasta Italy 10 4 4 10 Belgium 2 8 20 5 -(Table: Production Possibilities for Italy and Belgium) According to the table on production possibilities for Italy and Belgium, Italy and Belgium both could benefit if Italy were to specialize in:

Use the following to answer questions: Table: Production in the United States and Germany Labor units required to produce: One Clock One Sofa United States 2 5 Germany 3 9 -(Table: Production in the United States and Germany) According to the table, the opportunity cost of producing one clock in the United States is _________, and the opportunity cost of producing one clock in Germany is _______.

James and Linda must prepare a presentation for their marketing class. As part of their presentation, they must do a marketing plan and prepare 40 PowerPoint slides. It would take James 5 hours to do the required plan and 5 hours to prepare the slides. It would take Linda 6 hours to do the plan and 10 hours to prepare the slides. a. How much time would it take the two to complete the project if they divide the writing of the marketing plan equally and the development of the slides equally? b. How much time would it take the two to complete the project if they use comparative advantage and specialize in writing the marketing plan or preparing slides? c. If James and Linda have the same opportunity cost of $5 per hour, is there a better solution than for each to specialize?

The ability of one producer to produce one good or service using fewer inputs than another producer is:

Trade makes people better off only when they all have the same preferences.

Which of the following is TRUE regarding trade and wages?

Use the following to answer questions: Figure: Computers and Books -(Figure: Computers and Books) According to the figure, both countries can increase consumption if: