Exam 3: Interdependence and the Gains From Trade

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 an absolute advantage in the production of

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. The opportunity cost of 1 plate for Min is

Figure 3-13 Peru's Production Possibilities Frontier -Refer to Figure 3-13. Suppose Peru decides to increase its production of emeralds by 2. What is the opportunity cost of this decision?

Define comparative advantage.

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

​Whenever a nation is producing on its PPF, that nation will be using all of its available resources.

Figure 3-23 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-23. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Zimbabwe and Portugal would not be able to gain from trade if Zimbabwe's opportunity cost of one toothbrush changed to

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. The farmer should specialize in the production of

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. Which of the following statements is correct regarding comparative advantage?

Figure 3-1 Panel (a) Panel (b) -Refer to Figure 3-1. The rate of tradeoff between producing chairs and producing couches is constant in

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

If a person chooses self-sufficiency, then she can only consume what she produces.

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

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

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. Assume that Zimbabwe and Portugal each has 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is

Table 3-41 ​ ​ -Refer to Table 3-41. Which country has a comparative advantage in producing radios?

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Suppose Maxine decides to increase her production of tarts by 5. What is the opportunity cost of this decision?

Figure 3-24 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-24. Bob has

An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier.