Table 3-3 $\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\ \hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\ \hline \text { US } & 40 & 160 & 60 & 15 \\ \hline \text { Europe } & 50 & 150 & 48 & 16 \\ \hline \end{array}$ -Refer to Table 3-3.The opportunity cost of one aeroplane for Europe is:

A) four cars B) three cars C) 1/3 car D) 1/4 car A) four cars B) three cars C) 1/3 car D) 1/4 car B

Table 3-4 $\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\\ \hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \\ \hline \text { England } & 3 & 2 & 13.3 & 20 \\ \hline \text { Spain } & 1 & 5 & 40 & 8 \\ \hline \end{array}$ -One reason for which the English government might impose a tariff on Spanish cheese imports is:

A) national pride B) a general rivalry between Spain and England C) the possibility of disease in Spanish cheese D) pressure from English cheese lobby groups A) national pride B) a general rivalry between Spain and England C) the possibility of disease in Spanish cheese D) pressure from English cheese lobby groups D

Table 3-3 $\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\ \hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\ \hline \text { US } & 40 & 160 & 60 & 15 \\ \hline \text { Europe } & 50 & 150 & 48 & 16 \\ \hline \end{array}$ -Refer to Table 3-3.If the US and Europe trade according to the principle of comparative advantage, Europe will export what product to the US?

A) cars B) both aeroplanes and cars C) aeroplanes D) Europe should buy both products from the US A) cars B) both aeroplanes and cars C) aeroplanes D) Europe should buy both products from the US

Table 3-3 $\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\ \hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\ \hline \text { US } & 40 & 160 & 60 & 15 \\ \hline \text { Europe } & 50 & 150 & 48 & 16 \\ \hline \end{array}$ -Refer to Table 3-3.If the US and Europe trade according to the principle of comparative advantage, the US will export what product to Europe?

A) cars B) both aeroplanes and cars C) aeroplanes D) the US should buy both products from Europe A) cars B) both aeroplanes and cars C) aeroplanes D) the US should buy both products from Europe

Table 3-2 $\begin{array}{|c|c|c|c|c|}\hline&\text { Labour hours needed to produce one unit of: }&&\text { Amount produced in } 60 \text { hours: }\\ \hline & \text { Butter (kg) } & \text { Butter (kg } & \text { Rice (kg) } & \text { Rice (kg) } \\ \hline \text { Lee } & 6 & 10 & 15 & 4 \\ \hline \text { John } & 3 & 20 & 15 & 4\\\hline \end{array}$ -According to Table 3-2:

A) Lee and John both could benefit by Lee specialising in butter, and John specialising in rice B) Lee and John both could benefit by Lee specialising in butter, and John specialising in butter C) Lee and John both could benefit by Lee specialising in rice, and John specialising in butter D) Lee and John both could benefit by Lee specialising in rice, and John specialising in rice A) Lee and John both could benefit by Lee specialising in butter, and John specialising in rice B) Lee and John both could benefit by Lee specialising in butter, and John specialising in butter C) Lee and John both could benefit by Lee specialising in rice, and John specialising in butter D) Lee and John both could benefit by Lee specialising in rice, and John specialising in rice

Table 3-3 $\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\ \hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\ \hline \text { US } & 40 & 160 & 60 & 15 \\ \hline \text { Europe } & 50 & 150 & 48 & 16 \\ \hline \end{array}$ -Refer to Table 3-3.If Europe and the US trade according to the principle of comparative advantage:

A) all individuals in both countries will gain B) both countries can have more aeroplanes and cars C) Europe will specialise in cars and the US will specialise in aeroplanes D) both countries will consume on their own production possibilities frontier A) all individuals in both countries will gain B) both countries can have more aeroplanes and cars C) Europe will specialise in cars and the US will specialise in aeroplanes D) both countries will consume on their own production possibilities frontier

Table 3-2 $\begin{array}{|c|c|c|c|c|}\hline&\text { Labour hours needed to produce one unit of: }&&\text { Amount produced in } 60 \text { hours: }\\ \hline & \text { Butter (kg) } & \text { Butter (kg } & \text { Rice (kg) } & \text { Rice (kg) } \\ \hline \text { Lee } & 6 & 10 & 15 & 4 \\ \hline \text { John } & 3 & 20 & 15 & 4\\\hline \end{array}$ -According to Table 3-2:

A) Lee has a comparative advantage in rice, and John has an absolute advantage in butter B) Lee has a comparative advantage in butter, and John has an absolute advantage in rice C) Lee has a comparative advantage in rice, and John has an absolute advantage in neither goods D) Lee has a comparative advantage in butter, and John has an absolute advantage in neither goods A) Lee has a comparative advantage in rice, and John has an absolute advantage in butter B) Lee has a comparative advantage in butter, and John has an absolute advantage in rice C) Lee has a comparative advantage in rice, and John has an absolute advantage in neither goods D) Lee has a comparative advantage in butter, and John has an absolute advantage in neither goods

Table 3-3 $\begin{array}{|l|c|c|c|c|}\hline&\text { Hours needed to make one unit of: }&&\text { Amount produced in } 2400 \text { hours: }\\ \hline & \text { Cars } & \text { Aeroplanes } & \text { Cars } & \text { Aeroplanes } \\ \hline \text { US } & 40 & 160 & 60 & 15 \\ \hline \text { Europe } & 50 & 150 & 48 & 16 \\ \hline \end{array}$ -According to Table 3-3:

A) the US has a comparative advantage in aeroplanes, and Europe has a comparative advantage in aeroplanes B) the US has a comparative advantage in cars, and Europe has a comparative advantage in aeroplanes C) the US has a comparative advantage in aeroplanes, and Europe has a comparative advantage in cars D) the US has a comparative advantage in neither goods, and Europe has a comparative advantage in cars A) the US has a comparative advantage in aeroplanes, and Europe has a comparative advantage in aeroplanes B) the US has a comparative advantage in cars, and Europe has a comparative advantage in aeroplanes C) the US has a comparative advantage in aeroplanes, and Europe has a comparative advantage in cars D) the US has a comparative advantage in neither goods, and Europe has a comparative advantage in cars

Exam 3: Interdependence and the Gains From Trade

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -Refer to Table 3-3.The opportunity cost of one aeroplane for Europe is:

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(Multiple Choice)

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Question 1

Correct Answer:

Verified

B

Robinson Crusoe can produce 20 coconuts or 10 palm leaves in one day.Friday can produce 25 coconuts or five palm leaves in one day.Both individuals will be made better off through trade if Robinson specialises in producing coconuts and Friday specialises in producing palm leaves.

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(True/False)

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Question 2

Correct Answer:

Verified

False

Table 3-4 Labour hours needed to make one unit of: Amount Produced in 40 hours: Cheese Bread Cheese Bread England 3 2 13.3 20 Spain 1 5 40 8 -One reason for which the English government might impose a tariff on Spanish cheese imports is:

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(Multiple Choice)

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(True/False)

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Question 15

Graph 3-1 These figures illustrate the production possibilities frontiers for Robinson Crusoe and Friday with 12 hours of labour. -Refer to Graph 3-1.For Friday, the opportunity cost of 1 kg of fish is:

(Multiple Choice)

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Question 16

It takes Barbara four hours to make a pie and four hours to make a shirt.It takes Gary two hours to make a pie and five hours to make a shirt.Barbara should specialise in making shirts and Gary should specialise in making pies.Then they should trade.

(True/False)

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Question 17

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -According to Table 3-3:

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Question 18

Mark is a computer company executive, and earns $500 per hour managing the company and promoting its products.His daughter Regan is a high school student, and earns $6 per hour helping her grandmother on the farm.Mark's computer is broken.He can repair it himself in one hour.Regan can repair it in 10 hours.Mark has a comparative advantage in repairing the computer.

(True/False)

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Question 19

Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour. -According to Graph 3-2:

(Multiple Choice)

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Question 20

Exam 3: Interdependence and the Gains From Trade

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -Refer to Table 3-3.The opportunity cost of one aeroplane for Europe is:

Robinson Crusoe can produce 20 coconuts or 10 palm leaves in one day.Friday can produce 25 coconuts or five palm leaves in one day.Both individuals will be made better off through trade if Robinson specialises in producing coconuts and Friday specialises in producing palm leaves.

Table 3-4 Labour hours needed to make one unit of: Amount Produced in 40 hours: Cheese Bread Cheese Bread England 3 2 13.3 20 Spain 1 5 40 8 -One reason for which the English government might impose a tariff on Spanish cheese imports is:

A country's consumption possibilities frontier can be moved outside its production possibilities frontier:

As long as two people have different opportunity costs, each can gain from trade by being able to obtain a good at a price lower than his or her opportunity cost.

Rusty can edit two pages in one minute, and can type 80 words in one minute.Emily can edit one page in one minute and can type 100 words in one minute.Rusty has both an absolute and a comparative advantage in editing and Emily has both an absolute and a comparative advantage in typing.

Adam Smith's book An Inquiry into the Nature and Causes of the Wealth of Nations inspired David Ricardo, a millionaire stockbroker, to become an economist.

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -Refer to Table 3-3.If the US and Europe trade according to the principle of comparative advantage, Europe will export what product to the US?

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -Refer to Table 3-3.If the US and Europe trade according to the principle of comparative advantage, the US will export what product to Europe?

What factors might economists take into account when advising the Australian government on international trade?

Table 3-2 Labour hours needed to produce one unit of: Amount produced in 60 hours: Butter (kg) Butter (kg Rice (kg) Rice (kg) Lee 6 10 15 4 John 3 20 15 4 -According to Table 3-2:

People's motivation to trade comes from the goods or services they expect to get in return.

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -Refer to Table 3-3.If Europe and the US trade according to the principle of comparative advantage:

Table 3-2 Labour hours needed to produce one unit of: Amount produced in 60 hours: Butter (kg) Butter (kg Rice (kg) Rice (kg) Lee 6 10 15 4 John 3 20 15 4 -According to Table 3-2:

Adam Smith discusses that countries should be self-sufficient in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Graph 3-1 These figures illustrate the production possibilities frontiers for Robinson Crusoe and Friday with 12 hours of labour. -Refer to Graph 3-1.For Friday, the opportunity cost of 1 kg of fish is:

It takes Barbara four hours to make a pie and four hours to make a shirt.It takes Gary two hours to make a pie and five hours to make a shirt.Barbara should specialise in making shirts and Gary should specialise in making pies.Then they should trade.

Table 3-3 Hours needed to make one unit of: Amount produced in 2400 hours: Cars Aeroplanes Cars Aeroplanes US 40 160 60 15 Europe 50 150 48 16 -According to Table 3-3:

Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour. -According to Graph 3-2:

Ten Lessons From Economics

Thinking Like an Economist

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Business Strategy and Oligopoly

Competition Policy

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Global Financial Crisis of 2008 and Beyond

Five Debates Over Macroeconomic Policy

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