Exam 3: Interdependence and the Gains from Trade.

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.Without trade,the farmer produced and consumed 2 pounds of meat and 4 pounds of potatoes and the rancher produced and consumed 4 pounds of meat and 2 pounds of potatoes.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 3 pounds of meat for 6 pounds of potatoes.As a result,the farmer gained

Figure 3-4 -Refer to Figure 3-4.The opportunity cost of 1 novel for Jordan is

Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week.Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week.Zora has the comparative advantage in quilts and the absolute advantage in neither good,while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods.

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

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.We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel.If we were to do this,measuring toasters along the horizontal axis,then

Suppose that the country of Xenophobia chose to isolate itself from the rest of the world.Its ruler proclaimed that Xenophobia should become self-sufficient,so it would not engage in foreign trade.From an economic perspective,this idea would

When describing the opportunity cost of two producers,economists use the term

Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year,and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year.There are 10 workers in each country.Political pressure from the fish lobby in Farmland and from the wheat lobby in Boatland has prevented trade between the two countries on the grounds that cheap imports would kill the fish industry in Farmland and the wheat industry in Boatland.As a result,Boatland produces and consumes 25 units of wheat and 125 units of fish per year while Farmland produces and consumes 125 units of wheat and 25 units of fish per year.If the political pressure were overcome and trade were to occur,each country would completely specialize in the product in which it has a comparative advantage.If trade were to occur,the combined output of the two countries would increase by

Figure 3-4 -Refer to Figure 3-4.The opportunity cost of 1 novel for Perry is

Figure 3-3 -Refer to Figure 3-3.Without trade,Arturo produced and consumed 240 tacos and 120 burritos and Dina produced and consumed 100 tacos and 150 burritos.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 260 tacos for 156 burritos.As a result,Arturo gained

When a country has a comparative advantage in producing a certain good,

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.The opportunity cost of 1 plate for Min is

Figure 3-5 -Refer to Figure 3-5.If the production possibilities frontier shown for Merve is for 8 hours of work,then how long does it take Merve to make one purse?

Figure 3-6 -Refer to Figure 3-6.If Daisy must work 2.5 hours to make each pie,then her production possibilities frontier is based on how many hours of work?

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 a straight line,then "?" must be

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars.Also assume that Germany has an absolute advantage in both fish and cars.If these two countries specialize and trade so as to maximize the benefits of specialization and trade,then

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.Bonovia and Cropitia both can gain from trading with one another if one pound of cheese trades for

Table 3-12 -Refer to Table 3-12.Which of the following combinations of meat and potatoes could the rancher not produce in 40 hours?

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.The opportunity cost of 1 parasol for Huang is

Figure 3-8 -Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is