Exam 3: Interdependence and the Gains From Trade

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin. Fred and Barney both gain from the exchange. We can conclude that, for Barney, the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has an absolute advantage in the production of

Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. ​ -Refer to Table 3-25. Maya has an absolute advantage in the production of

Table 3-10 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ ​ ​ -Refer to Table 3-10. 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 airplanes along the horizontal axis, then

Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. ​ -Refer to Table 3-25. The opportunity cost of 1 toaster for Maya is

Total output in an economy increases when each person specializes because

Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one umbrella?

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ -Refer to Table 3-26. Japan's opportunity cost of one airplane is

An economy's production possibilities frontier is also its consumption possibilities frontier

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Without trade, Uzbekistan produced and consumed 12 bolts and 36 nails and Azerbaijan produced and consumed 14 bolts and 24 nails. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 16 bolts for 38 nails. As a result, Uzbekistan gained

Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. ​ -Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Table 3-6 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-6. Which of the following represents Zimbabwe's and Portugal's production possibilities frontiers when each country has 60 minutes of machine time available?

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ -Refer to Table 3-26. Korea has an absolute advantage in the production of

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo and Dina would not be able to gain from trade if Dina's opportunity cost of one taco changed to

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne must work 0.5 hour to make each purse, then her production possibilities frontier is based on how many hours of work?

Table 3-10 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ ​ ​ -Refer to Table 3-10. Assume that Japan and Korea each has 2400 hours available. If each country divides its time equally between the production of cars and airplanes, then total production is

Table 3-29 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. ​ -Refer to Table 3-29. Shantala has an absolute advantage in

Table 3-28 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. ​ -Refer to Table 3-28. Barb's opportunity cost of testing one computer is setting up

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage, then total production will increase by

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. If Uzbekistan and Azerbaijan each spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 bolts for 36 nails, then