Table 3-1 \(\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make } 1 \mathrm{~kg} \text { of: }&&\text { Kgs produced in } 20 \text { hours: }\\ \hline & \text { Meat } & \text { Potatoes } & \text { Meat } & \text { Potatoes } \\ \hline \text { Potato farmer } & 10 & 5 & 2 & 4 \\ \hline \text { Zattle farmer } & 4 & 1 & 5 & 20 \\ \hline \end{array}\) -Refer to Table 3-1.For the potato farmer, the opportunity cost of 1 kg of potatoes is:

A) eight hours of labour B) 1/2 kg of meat C) 2 kg of meat D) four hours of labour A) eight hours of labour B) 1/2 kg of meat C) 2 kg of meat D) four hours of labour

Table 3-2 \(\begin{array}{|c|c|c|c|c|}\hline&\text { Labour hours needed to produce one unit of: }&&\text { Amount produced in } 60 \text { hours: }\\ \hline & \text { Butter (kg) } & \text { Butter (kg } & \text { Rice (kg) } & \text { Rice (kg) } \\ \hline \text { Lee } & 6 & 10 & 15 & 4 \\ \hline \text { John } & 3 & 20 & 15 & 4\\\hline \end{array}\) -Refer to Table 3-2.The opportunity cost of 1 kg of butter for Lee is:

A) 3/2 kg of rice B) 4/3 kg of rice C) 3/4 kg of rice D) 2/3 kg of rice A) 3/2 kg of rice B) 4/3 kg of rice C) 3/4 kg of rice D) 2/3 kg of rice

A) make everyone better off B) make some people produce better goods C) make some countries pay more for all goods D) make some people better off and some people worse off A) make everyone better off B) make some people produce better goods C) make some countries pay more for all goods D) make some people better off and some people worse off

Table 3-4 \(\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\\ \hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \\ \hline \text { England } & 3 & 2 & 13.3 & 20 \\ \hline \text { Spain } & 1 & 5 & 40 & 8 \\ \hline \end{array}\) -Refer to Table 3-4.The opportunity cost of one unit of bread in Spain is:

A) one unit of cheese B) five units of cheese C) 1/5 unit of cheese D) 1/3 unit of cheese A) one unit of cheese B) five units of cheese C) 1/5 unit of cheese D) 1/3 unit of cheese

Table 3-2 \(\begin{array}{|c|c|c|c|c|}\hline&\text { Labour hours needed to produce one unit of: }&&\text { Amount produced in } 60 \text { hours: }\\ \hline & \text { Butter (kg) } & \text { Butter (kg } & \text { Rice (kg) } & \text { Rice (kg) } \\ \hline \text { Lee } & 6 & 10 & 15 & 4 \\ \hline \text { John } & 3 & 20 & 15 & 4\\\hline \end{array}\) -Refer to Table 3-2.For Lee the opportunity cost of 1 kg of rice is:

A) 4/3 kg of butter B) 3/4 kg of butter C) 2/3 kg of butter D) 3/2 kg of butter A) 4/3 kg of butter B) 3/4 kg of butter C) 2/3 kg of butter D) 3/2 kg of butter

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

Table 3-4 \(\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\\ \hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \\ \hline \text { England } & 3 & 2 & 13.3 & 20 \\ \hline \text { Spain } & 1 & 5 & 40 & 8 \\ \hline \end{array}\) -Refer to Table 3-4.The opportunity cost of one unit of cheese in Spain is:

A) one unit of bread B) five units of bread C) 1/5 unit of bread D) 1/3 unit of bread A) one unit of bread B) five units of bread C) 1/5 unit of bread D) 1/3 unit of bread

Table 3-1 \(\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make } 1 \mathrm{~kg} \text { of: }&&\text { Kgs produced in } 20 \text { hours: }\\ \hline & \text { Meat } & \text { Potatoes } & \text { Meat } & \text { Potatoes } \\ \hline \text { Potato farmer } & 10 & 5 & 2 & 4 \\ \hline \text { Zattle farmer } & 4 & 1 & 5 & 20 \\ \hline \end{array}\) -Refer to Table 3-1.For the cattle farmer, the opportunity cost of 1 kg of meat is:

A) five hours of labour B) one hour of labour C) 1/4 kg of potatoes D) 4 kg of potatoes A) five hours of labour B) one hour of labour C) 1/4 kg of potatoes D) 4 kg of potatoes

Table 3-4 \(\begin{array}{|l|c|c|c|c|}\hline&\text { Labour hours needed to make one unit of: }&&\text { Amount Produced in } 40 \text { hours: }\\ \hline & \text { Cheese } & \text { Bread } & \text { Cheese } & \text { Bread } \\ \hline \text { England } & 3 & 2 & 13.3 & 20 \\ \hline \text { Spain } & 1 & 5 & 40 & 8 \\ \hline \end{array}\) -According to Table 3-4, if the English government decided to impose a tariff on cheese imports, this would:

A) make bread and cheese cheaper for English consumers B) make bread and cheese more expensive for English consumers C) make bread more expensive for English consumers D) make cheese more expensive for English consumers A) make bread and cheese cheaper for English consumers B) make bread and cheese more expensive for English consumers C) make bread more expensive for English consumers D) make cheese more expensive for English consumers

Exam 3: Interdependence and the Gains From Trade

Graph 3-1 These figures illustrate the production possibilities frontiers for Robinson Crusoe and Friday with 12 hours of labour. -According to Graph 3-1:

(Multiple Choice)

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Question 81

Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour. -According to Graph 3-2, if Amy and Jim both specialise completely in the good in which they have a comparative advantage, total production of coffee and total production of doughnuts will be _____ respectively.

(Multiple Choice)

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Question 82

Comparative advantage will always occur when two parties have different opportunity costs in production.

(True/False)

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Question 83

Table 3-1 Labour hours needed to make 1 of: Kgs produced in 20 hours: Meat Potatoes Meat Potatoes Potato farmer 10 5 2 4 Zattle farmer 4 1 5 20 -Refer to Table 3-1.For the potato farmer, the opportunity cost of 1 kg of potatoes is:

(Multiple Choice)

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Question 84

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 Robinson Crusoe, the opportunity cost of 1 kg of fish is:

(Multiple Choice)

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Question 85

When parties specialise in the production of goods they have a comparative advantage in, total production is increased and both parties can gain from trade.

(True/False)

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Question 86

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 -Refer to Table 3-2.The opportunity cost of 1 kg of butter for Lee is:

(Multiple Choice)

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Question 87

Trade will:

(Multiple Choice)

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Question 88

Is the statement 'international trade can make everyone better off' true? Why or why not?

(Essay)

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Question 89

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 -Refer to Table 3-4.The opportunity cost of one unit of bread in Spain is:

(Multiple Choice)

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Question 90

The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.

(True/False)

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Question 91

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 -Refer to Table 3-2.For Lee the opportunity cost of 1 kg of rice is:

(Multiple Choice)

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Question 92

A Korean worker can produce 10 cars per month or grow 1500 kg of wheat per month and an American worker can produce four cars or 1700 kg of rice per month.Korea and the US can both gain if Korea makes more cars and exports them to the US in exchange for imports of increased output of Australian rice.

(True/False)

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Question 93

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:

(Multiple Choice)

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Question 94

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 -Refer to Table 3-4.The opportunity cost of one unit of cheese in Spain is:

(Multiple Choice)

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Question 95

One reason trade benefits both parties is that it allows each to specialise in what they do better.

(True/False)

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Question 96

Table 3-1 Labour hours needed to make 1 of: Kgs produced in 20 hours: Meat Potatoes Meat Potatoes Potato farmer 10 5 2 4 Zattle farmer 4 1 5 20 -Refer to Table 3-1.For the cattle farmer, the opportunity cost of 1 kg of meat is:

(Multiple Choice)

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Question 97

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 -According to Table 3-4, if the English government decided to impose a tariff on cheese imports, this would:

(Multiple Choice)

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Question 98

Trade is not based on absolute advantage; rather it is based on comparative advantage.

(True/False)

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Question 99

In order to have a linear production possibilities frontier (one that is not bowed out), it must be that:

(Multiple Choice)

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Question 100

Exam 3: Interdependence and the Gains From Trade

Graph 3-1 These figures illustrate the production possibilities frontiers for Robinson Crusoe and Friday with 12 hours of labour. -According to Graph 3-1:

Comparative advantage will always occur when two parties have different opportunity costs in production.

Table 3-1 Labour hours needed to make 1 of: Kgs produced in 20 hours: Meat Potatoes Meat Potatoes Potato farmer 10 5 2 4 Zattle farmer 4 1 5 20 -Refer to Table 3-1.For the potato farmer, the opportunity cost of 1 kg of potatoes is:

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 Robinson Crusoe, the opportunity cost of 1 kg of fish is:

When parties specialise in the production of goods they have a comparative advantage in, total production is increased and both parties can gain from 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 -Refer to Table 3-2.The opportunity cost of 1 kg of butter for Lee is:

Trade will:

Is the statement 'international trade can make everyone better off' true? Why or why not?

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 -Refer to Table 3-4.The opportunity cost of one unit of bread in Spain is:

The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.

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 -Refer to Table 3-2.For Lee the opportunity cost of 1 kg of rice is:

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:

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 -Refer to Table 3-4.The opportunity cost of one unit of cheese in Spain is:

One reason trade benefits both parties is that it allows each to specialise in what they do better.

Table 3-1 Labour hours needed to make 1 of: Kgs produced in 20 hours: Meat Potatoes Meat Potatoes Potato farmer 10 5 2 4 Zattle farmer 4 1 5 20 -Refer to Table 3-1.For the cattle farmer, the opportunity cost of 1 kg of meat is:

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 -According to Table 3-4, if the English government decided to impose a tariff on cheese imports, this would:

Trade is not based on absolute advantage; rather it is based on comparative advantage.

In order to have a linear production possibilities frontier (one that is not bowed out), it must be that:

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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