Exam 2: Comparative Advantage

Suppose Cathy and Lewis work in a bakery making pies and cakes.Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake.What is the opportunity cost to Cathy of making a cake?

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie.What is the opportunity cost to Dan of making a sandwich?

Refer to the figure below.Moving from point B to point A, the opportunity cost of 25 more salads is:

Which of the following is NOT a reason why there are gains to specialization?

If Jane can produce 3 pairs of shoes per hour, while Bob can produce 2, then ______ has a(n) ______ advantage in producing shoes.

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. The opportunity cost of making a calculator for Smith is ______ and for Jones it is ______.

Refer to the figure below.The opportunity cost of making an additional salad:

Earth Movers & Shakers operates 3 iron ore mines.The table below shows each mine's total daily production and the current number of miners at each mine.All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. The opportunity cost of moving one miner from Scraping Bottom to another mine is:

On a graph of a production possibilities curve, an inefficient point is:

Smith and Jones comprise a two­person economy.Their hourly rates of production are shown below. If Smith and Jones are dividing their time efficiently and producing more than 10 computers and fewer than 120 calculators per hour, then Smith will ______ and Jones will ______.

The figure below shows Becky's daily production possibilities curve for dresses and skirts. Point U is:

If a nation can produce a more computers per year than any other nation, that nation has a(n) ______ advantage in the production of computers.

Refer to the figure below.For Pat, the opportunity cost of removing one bag of trash is planting:

Moe divides his time between studying Physics and studying Economics.His production possibilities curve for his final grade in each class is shown below. The Principle of Increasing Opportunity Cost is reflected in the fact that the opportunity cost going from 70 to 80 in economics is:

You have noticed that your next­door neighbor, Mary, always works in the garden, and her husband, Joe, always walks the dog.You conclude that if Joe and Mary are efficient, then it must be the case that:

Suppose Colin brews beer and makes cheese.If Colin can increase his production of beer without decreasing his production of cheese, then he is producing at an:

Earth Movers & Shakers operates 3 iron ore mines.The table below shows each mine's total daily production and the current number of miners at each mine.All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Suppose Earth Movers & Shakers needs to fill an order for 60 tons of ore in a single day.If it has no other orders for that day, it should:

Points that lie below the production possibilities curve are inefficient because:

Lou and Alex live together and share household chores.They like to cook some meals ahead of time and eat leftovers.The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. If Alex and Lou work out an efficient arrangement for these two chores, then under that arrangement:

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie.Which of the following statements is correct?