Exam 3: Interdependence and the Gains from Trade.

Trade allows all countries to achieve greater prosperity.

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 and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

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 yard of cloth is

Which of the following is not correct?

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.Without trade,England produced and consumed 32 units of cheese and 2 units of bread and Spain produced and consumed 6 units of cheese and 2 units of bread.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread.As a result,England gained

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth.Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

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 should specialize in the production of

Figure 3-5 -Refer to Figure 3-5.Hosne's opportunity cost of one purse is

Ben bakes bread and Shawna knits sweaters.Ben and Shawna both like to eat bread and wear sweaters.In which of the following cases is it impossible for both Ben and Shawna to benefit from trade?

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.England has a comparative advantage in the production of

When each person specializes in producing the good in which he or she has a comparative advantage,total production in the economy

An economy can produce at any point on or inside its production possibilities frontier,but it cannot produce at points outside its production possibilities frontier.

When an economist points out that you and millions of other people are interdependent,he or she is referring to the fact that we all

Figure 3-4 -Refer to Figure 3-4.Which of the following is not correct?

An economy's production possibilities frontier is also its consumption possibilities frontier

Both Bill and Mary produce t-shirts and hats.If Bill's opportunity cost of 1 t-shirt is 4 hats and Mary's opportunity cost of 1 t-shirt is 3 hats,then

Suppose Jim and Tom can both produce baseball bats.If Jim's opportunity cost of producing baseball bats is lower than Tom's opportunity cost of producing baseball bats,then

Some countries win in international trade,while other countries lose.

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

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.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?