Exam 3: Interdependence and the Gains From Trade

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Merve should specialize 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. Miguel has an absolute advantage in the production of

Table 3-16 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-16. If the production possibilities frontier is bowed outward, then "?" could be

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. Brad has a comparative advantage in the production of

Abby bakes brownies and Liam grows flowers. In which of the following cases is it impossible for both Abby and Liam to benefit from trade?

Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. Brad has an absolute advantage in the production of

Specialization and trade can make everyone better off if a person can obtain goods at prices that are less than that person's opportunity cost.

Table 3-19 Summary of the Gains from Trade ​ -Refer to Table 3-19. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. ​ ​ -Refer to Table 3-24. England has a comparative advantage in the production of

By definition, imports are

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. ​ ​ -Refer to Table 3-24. The opportunity cost of 1 unit of bread for England is

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. If Mary and Kate trade foods with each other, who will trade away muffins in exchange for cookies?

Figure 3-22 Alice and Betty's Production Possibilities in one 8-hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-22. What are Alice and Betty's opportunity costs of 1 pizza?

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Suppose Uzbekistan decides to increase its production of bolts by 10. What is the opportunity cost of this decision?

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile has an absolute advantage in the production of

Scenario 3-2 In country A a worker who works 40 hours can produce 200 pounds of rice or 100 pounds of broccoli. In country B a worker who works 40 hours can produce 160 pounds of rice or 120 pounds of broccoli. -Refer to Scenario 3-2. Which country, if either, has a comparative advantage producing rice? Defend your answer using the numbers given.

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Hosne's opportunity cost of one wallet is

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. ​ ​ -Refer to Table 3-24. The opportunity cost of 1 unit of cheese for Spain is