Exam 3: Interdependence and the Gains From Trade

Table 3-15 ​ ​ -Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage.

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. At which of the following prices would both Chile and Colombia gain from trade with each other?

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. ​ -Refer to Table 3-23. Without trade, the farmer produced and consumed 2 pounds of pork and 4 pounds of tomatoes and the rancher produced and consumed 4 pounds of pork and 2 pounds of tomatoes. Then, each person agreed to specialize in the production of the good in which he has a comparative advantage and trade 4 pounds of pork for 6 pounds of tomatoes. As a result,

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 combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

For two individuals who engage in the same two productive activities, it is impossible for one of the two individuals to

Table 3-3 Production Opportunities ​ -Refer to Table 3-3. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for France. If we were to do this, measuring wine along the horizontal axis, then

Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could

Table 3-41 ​ ​ -Refer to Table 3-41. If the two countries specialize and trade with each other, which country will import radios?

Table 3-30 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-30. Falda has an absolute advantage in the production of

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is

Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can type 100 words in one minute. Timmy has an absolute advantage and a comparative advantage in editing, while Olivia has an absolute advantage and a comparative advantage in typing.

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then

Adam Smith wrote that a person should never attempt to make at home what it will cost him more to make than to buy.

Table 3-35 -Refer to Table 3-35. Finland's opportunity cost of producing 1 unit of ham is

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. Canada's opportunity cost of one unit of Good X is

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 novel for Perry is

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. ​ -Refer to Table 3-27. Min has an absolute advantage in the production of

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. The opportunity cost of 1 cup for Juba is