Exam 3: Interdependence and the Gains from Trade.

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.For many years the two countries traded,each completely specializing according to their respective comparative advantages.Now,however,war has broken out between them and all trade has stopped.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.The war has caused the combined yearly output of the two countries to decline by

Adam Smith asserted that a person should never attempt to make at home

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 should export

Differences in opportunity cost allow for gains from trade.

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.Jim has an absolute advantage in

Figure 3-4 -Refer to Figure 3-4.If the production possibilities frontier shown for Perry is for 6 months of writing,then how long does it take Perry to write one poem?

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year.Each nation has 100 workers,and each country specializes according to the principle of comparative advantage.If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year,then each country's maximum consumption of new radios and televisions per year will be

Table 3-16 Summary of the Gains from Trade -Refer to Table 3-16.The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade.What are Alice and Betty's gains from specialization and trade?

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 car is

Figure 3-7 -Refer to Figure 3-7.If the production possibilities frontier shown for Juba is for 2 hours of work,then how long does it take Juba to make one bowl?

If labor in Mexico is less productive than labor in the United States in all areas of production,

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

Figure 3-4 -Refer to Figure 3-4.If Perry and Jordan both spend all of their time writing poems,then total production 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.Which of the following combinations of mixers and toasters could Miguel not produce in 90 hours?

Figure 3-6 -Refer to Figure 3-6.Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy.Which of the following combinations of pies and tarts could Maxine not then consume,assuming Maxine specializes in making pies and Daisy specializes in making tarts?

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 produce in a given month?

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 an absolute advantage in the production of

Figure 3-6 -Refer to Figure 3-6.If the production possibilities frontiers shown are each for one day of work,then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Figure 3-7 -Refer to Figure 3-7.Bintu has an absolute advantage in the production of

For a self-sufficient producer,the production possibilities frontier