Exam 3: Interdependence and the Gains from Trade.

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for one month of production,then which of the following combinations of emeralds and rubies could Peru not produce in a given month?

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Zimbabwe's opportunity cost of one hairbrush is

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.Which of the following points would not be on Jim's production possibilities frontier,based on a 40-hour week?

Figure 3-4 -Refer to Figure 3-4.Suppose Perry is willing to trade 4 poems to Jordan for each novel that Jordan writes and sends to Perry.Which of the following combinations of novels and poems could Jordan then consume,assuming Jordan specializes in novel production and Perry specializes in poem production?

The principle of comparative advantage states that,regardless of the price at which trade takes place,everyone will benefit from trade if they specialize in the production of the good for which they have a comparative advantage.

Figure 3-3 -Refer to Figure 3-3.Arturo's opportunity cost of one burrito is

International trade can make some individuals within a country worse off,even as it makes the country as a whole better off.

Figure 3-9 -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 bolts for 36 nails,then

When two countries trade with one another,it is most likely because

To produce 100 bushels of wheat,Farmer A requires fewer inputs than does Farmer B.We can conclude that Farmer A has an absolute advantage over Farmer B in producing wheat.

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8.Assume that Huang and Min each has 36 labor hours available.Originally,each person divided his/her time equally between the production of parasols and plates.Now,each person spends all their time producing the good in which they have a comparative advantage.As a result,the total output of plates increased by

Figure 3-11 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 3-11.In the nation of Cropitia,the opportunity cost of a pound of cheese is 1.5 pounds of ham.Based on this information,if Bonovia and Cropitia want to trade,Bonovia should specialize in the production of

Figure 3-6 -Refer to Figure 3-6.At which of the following prices would both Maxine and Daisy gain from trade with each other?

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 has a comparative advantage in the production of

Figure 3-9 -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

If one producer is able to produce a good at a lower opportunity cost than some other producer,then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

A production possibilities frontier is a straight line when

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. -Refer to Table 3-10.Juanita has an absolute advantage in

Economists generally support

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's opportunity cost of one airplane is