Exam 3: Interdependence and the Gains from Trade.

Harry is a computer company executive,earning $200 per hour managing the company and promoting its products.His daughter Quinn is a high school student,earning $6 per hour helping her grandmother on the farm.Harry's computer is broken.He can repair it himself in one hour.Quinn can repair it in 10 hours.Harry's opportunity cost of repairing the computer is lower than Quinn's.

Assume a farmer has the ability to produce corn and/or beans.Whenever the farmer spends 1 hour less producing corn and 1 hour more producing beans,he reduces his output of corn by 2 bushels and raises his output of beans by 3 bushels.In view of these assumptions,the farmer's production possibilities frontier is bowed out.

Table 3-15 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-15.If the production possibilities frontier is bowed outward,then "?" could be

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The opportunity cost of 1 pound of meat for the rancher is

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The farmer has a comparative advantage in the production of

The gains from specialization and trade are based on absolute advantage.

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7.Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

Table 3-9 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. -Refer to Table 3-9.The number of minutes needed by Barb to test a computer is

Figure 3-7 -Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together not make in a given 4-hour production period?

Figure 3-6 -Refer to Figure 3-6.Daisy has an absolute advantage in the production of

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Falda's opportunity cost of one bushel of wheat is

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba has a comparative advantage in the production of

Figure 3-9 -Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Table 3-12 -Refer to Table 3-1.Relative to the farmer,the rancher has an absolute advantage in the production of

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the farmer is

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.Maya should specialize in the production of

Figure 3-9 -Refer to Figure 3-9.Suppose Uzbekistan decides to increase its production of bolts by 10.What is the opportunity cost of this decision?

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.What is Zardia's opportunity cost of producing one pound of beef?

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.At which of the following prices would both Aruba and Iceland gain from trade with each other?

Adam Smith wrote that a person should never attempt to make at home what it will cost him more to make than to buy.