Exam 3: Interdependence and the Gains from Trade.

International trade may make some individuals in a nation better off,while other individuals are made worse off.

Figure 3-9 -Refer to Figure 3-9.Azerbaijan should specialize in the production of

If Shawn can produce more donuts in one day than Sue can produce in one day,then

Figure 3-8 -Refer to Figure 3-8.Chile's opportunity cost of one pound of coffee is

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.The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

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.Andia has an absolute advantage in the production of

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

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's opportunity cost of one cooler is

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Table 3-13 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-13.If the production possibilities frontier is bowed outward,then "?" could be

Figure 3-4 -Refer to Figure 3-4.Perry has a comparative advantage in the production of

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.Assume that England and Spain each has 40 labor hours available.If each country divides its time equally between the production of cheese and bread,then total production is

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.Without trade,Japan produced and consumed 50 cars and 6 airplanes and Korea produced and consumed 27 cars and 7 airplanes.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 28 cars for 8 airplanes.As a result,Japan gained

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods.

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year,and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.Each nation has 10 workers.Without trade,Freedonia produces and consumes 30 units of corn and 10 units of wheat per year.Sylvania produces and consumes 10 units of corn and 30 units of wheat.Suppose that trade is then initiated between the two countries,and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat.Freedonia will now be able to consume a maximum of

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 should specialize in the production of

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.The opportunity cost of 1 unit of cheese for England is

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

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 table is

Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts.Also suppose the US has an absolute advantage in the production of both semiconductors and auto parts.The US should