Exam 8: Gains From Trade

(Table: Four individuals) The table lists the hours that it will take four individuals to clean out a garage and to trim a property's hedges. ​ Who has a comparative advantage in trimming the hedges?

Markets whose payoffs are linked to whether an uncertain event occurs are called _____ markets.

Aree has a smoothie business. The average price of smoothies in her city rises, and this encourages Aree to increase the price and the quantity that she produces. Her response to the price increase is an example of price functioning as

Raul works at a factory that produces wooden benches. The four main tasks are cutting the wood, constructing, sanding, and staining. Out of all the workers, Raul enjoys cutting the most, is the slowest at constructing, has the lowest opportunity cost for sanding, and is the fastest at staining. If his manager wants to maximize factory output, he will assign Raul to

The table provides data on the minutes it takes for Mara and Nishan to change the sheets on all the beds in the house and to fix dinner. Use the data to answer the essay question. Who has a comparative advantage each task? Use the data to explain how you arrived at this conclusion.

How do internal markets overcome a manager's knowledge problem?

Trade based on comparative advantage does NOT result in _____ but DOES result in _____.

What institution allows people to gain access to others who have different comparative advantages without meeting them or communicating directly with them?

Comparative advantage explains why people

When trade is based on comparative advantage

(Table: Eray and Ata's opportunity cost) Data for Eray's and Ata's decorating is given in the table. Which statement explains who has the comparative advantage in decorating cakes? Eray and Ata Decorate Cakes and Cupcakes Minutes to decorate a cake Number of cupcakes that can be decorated in time it takes to decorate a cake Eray 120 24 Ata 130 20

When your employees receive work assignments based on who has the lowest opportunity cost in performing each task, the basis for the work assignments is

Prices function as signals, incentives, and bundles of information. Explain what these functions are and how each is a distinct function.

You have a comparative advantage if you can complete a task:

Artem manages a coat factory where the main tasks are cutting, sewing, and pressing. Workers vary in their abilities to do each task. What basis should Artem use to assign the workers?

Which of the following is a FALSE statement about assigning work based on comparative advantage?

Chantelle grows tomatoes and sells them at the farmer's market. Because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price functioning as

Which of the following statements about international trade is TRUE?

Prices in currency futures markets and bond markets provide

The main role of markets is: