Exam 3: Interdependence and the Gains From Trade

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 Y is

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year. Each nation has 100 workers, and each country specializes according to the principle of comparative advantage. If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year, then each country's maximum consumption of new radios and televisions per year will be

The opportunity cost of an item is

Which of the following is not a reason people choose to depend on others for goods and services?

Scenario 3-1 The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time. Greg's Production Possibilities Catherine's Production Possibilities -Refer to Scenario 3-1. What is Catherine's opportunity cost of producing cake? Explain how you derived your answer.

Table 3-21 Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. -Refer to Table 3-21. Jamaica has a comparative advantage in the production of

​Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Azerbaijan's opportunity cost of one bolt is

Table 3-17 The following table contains some production possibilities for an economy for a given year. -Refer to Table 3-17. If the production possibilities frontier is a straight line, then "?" must be

Table 3-41 ​ ​ -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

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. If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese, then England will consume

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. Assume that Brad and Theresa each has 60 minutes available. If each person spends all his or her time producing the good in which he or she has a comparative advantage, then total production is

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

​Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good.

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. 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?

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 a straight line, then "?" must be

Table 3-36 -Refer to Table 3-36. If Antigua and Barbuda decide to trade with each other, Antigua should specialize in the production of

A production possibilities frontier is bowed outward when

​Table 3-38 -​Refer to Table 3-38. Iowa and Nebraska can both produce corn and soybeans, and can switch between the production of corn and soybeans at a constant rate. The table illustrates the amount of corn or soybeans each state can produce in one growing season. From the table we know that Iowa has a

​Trade does not benefit a nation if that nation has a comparative advantage in the production of that good.