Exam 3: Interdependence and the Gains from Trade

South Korea can produce shoes,clothes,TV sets,and computers cheaper than any other country.What would one expect South Korea to export?

Figure 3-2 -Refer to Figure 3-2.Assume that Cliff and Paul were both producing wheat and corn,and both were dividing their time equally between the two.Then they decide to specialize in the product for which they have a comparative advantage.What would happen to the production of corn?

Table 3-3 -Refer to Table 3-3.What does each of the two producers have a comparative or absolute advantage in?

Table 3-6 -Refer to Table 3-5.Which country has an absolute advantage in each product?

When will a production possibilities frontier be linear and not bowed out?

Table 3-3 -Refer to Table 3-3.What does each of the two producers have an absolute advantage in?

Figure 3-4 -Refer to Figure 3-4.For Ben,what is the opportunity cost of one bottle of beer?

Jonathan can make a birdhouse in three hours.He can make a bird feeder in three hour.The opportunity cost to Jonathan of making a birdhouse is 1/3 bird feeder.

Table 3-2 -Refer to Table 3-2.What is the opportunity cost of 1 kilogram of meat for the farmer?

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.Then suppose that trade is initiated between the two countries,and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat.What maximum amounts will Freedonia now be able to consume?

Table 3-6 -Refer to Table 3-5.England and Spain trade according to the principle of comparative advantage.If the international price of bread is 2.5 units of cheese for 1 unit of bread,what is the gain from trade to Spain per unit of bread traded?

Figure 3-1 -Refer to Figure 3-1.What is the opportunity cost of 1 bushel of wheat for Cliff?

If there is trade,which of the following is most likely?

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 and so would not engage in foreign trade.From an economic perspective,when would this idea make sense?

Regan grows flowers and makes vases.Jayson also grows flowers and makes vases,but Regan is better at producing both.Who has an absolute or comparative advantage in what activity?

Which of the following could benefit Canada?

What is trade based on?

Table 3-4 -Refer to the table.What is the opportunity cost of one birdhouse for Manitoba?

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 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 was overcome and trade was to occur,each country would completely specialize in the product for which it has a comparative advantage.If trade were to occur,by how much would the combined output of the two countries increase?

Using all available resources,if a farmer can produce either 85 cantaloupes or 70 watermelons,what is the opportunity cost of 1 cantaloupe to the farmer?