Exam 3: Interdependence and the Gains From Trade

Which of the following statements is not correct?

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.Which of the following statements is true?

Table 3-3 -Refer to Table 3-3.Montana has a comparative advantage in

Which of the following statements about comparative advantage is not true?

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 4 televisions per year.Each nation has 100 workers.Also suppose that each country completely specializes in producing the good for which it has a comparative advantage.If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year,then each country's maximum consumption of new radios and televisions per year will be

Table 3-1 -Refer to Table 3-1.The farmer has an absolute advantage in

For the following question(s), use the accompanying table. Table 3-2 -Refer to Table 3-2.Helen has a comparative advantage in

Figure 3-3 -Refer to Figure 3-3.Ginger has a comparative advantage in

Suppose it takes a Chinese worker 2 hours to produce a ceramic pot,and 20 hours to produce a tablecloth.Suppose,also,that it takes an American worker 2 hours to produce a ceramic pot and 10 hours to produce a tablecloth.It will be worthwhile for China to produce extra pots and export them to the United States in return for imported U.S.tablecloths.

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

Table 3-3 -Refer to Table 3-3.If Montana and Missouri were to specialize and engage in trade that would benefit both states,they would most likely base their decisions on the principle of

Total output in an economy increases when each person specializes because

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

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.The number of minutes needed by Eric to test a computer is

These figures illustrate the production possibilities available to Barney and Betty with 8 hours of labor in their baker Figure 3-4 -Refer to Figure 3-4.Initially,Barney is spending one-half of his time making pies and the other one-half of his time making bread,and Betty is doing the same.Relative to this initial situation,Barney and Betty could specialize according to the principle of comparative advantage,and both could benefit from this new arrangement,provided they agree that one pie will trade for somewhere between

Shannon bakes cookies and Justin grows vegetables.In which of the following cases is it impossible for both Shannon and Justin to benefit from trade?

David Ricardo,a millionaire stockbroker and economist,

Figure 3-3 -Refer to Figure 3-3.Ginger has an absolute advantage in

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

Use the accompanying table to answer the following questions: Table 3-6 -Refer to Table 3-6.If England and Spain specialize and trade based on the principle of comparative advantage,England will export