Exam 3: Interdependence and the Gains From Trade

Table 3-4 Brenda and Eric run a business that involves setting up and testing computers. The following table applies. -Refer to Table 3-4.Which of these points would not be on Eric's production possibilities frontier,based on a 40-hour week and assuming Eric can switch between setting up and testing computers at a constant rate?

Kelly and David are both capable of repairing cars and cooking meals.Which of the following scenarios is not possible?

Table 3-5 -Refer to Table 3-5.Japan has a comparative advantage in

Table 3-1 -Refer to Table 3-1.The opportunity cost of 1 pound of meat for the farmer is

Figure 3-1 -Refer to Figure 3-1.The opportunity cost of 2 bushels of corn for Cliff is

The only two countries in the world,Alpha and Omega,face the following production possibilities frontiers. a.Assume that each country decides to use half of its resources in the production of each good.Show these points on the graphs for each country as point a. b.If these countries choose not to trade, what would be the total world production of popcorn and peanuts? c.Now suppose that each country decides to specialize in the good in which each has a comparative advantage.By specializing, what is the total world production of each product now? d.If each country decides to trade 100 units of popcorn for 100 units of peanuts, show on the graphs the gain each country would receive from trade.Label these points B.

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

Figure 3-3 -Refer to Figure 3-3.The opportunity cost of 1 pair of tap shoes for Fred is

Table 3-5 -Refer to Table 3-5.If the United States and Japan trade based on the principle of comparative advantage,the United States will

Absolute advantage is found by comparing different producers'

Table 3-5 -Refer to Table 3-5.The opportunity cost of 1 car for Japan is

Table 3-5 -Refer to Table 3-5.Japan has an absolute advantage in

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.) -Refer to Figure 3-5.Which of the following combinations of cars and corn could Country A not produce in a given month?

The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

A production possibilities frontier will be a straight line if

Some countries win in international trade,while other countries lose.

Use the accompanying table to answer the following questions: Table 3-6 -Refer to Table 3-6.England has an absolute advantage in

For the following question(s), use the accompanying table. Table 3-2 -Refer to Table 3-2.For Carolyn,the opportunity cost of 1 quilt is

Canada and the U.S.both produce wheat and computer software.Canada is said to have the comparative advantage in producing wheat if

Figure 3-1 -Refer to Figure 3-1.The opportunity cost of 1 bushel of wheat for Cliff is