Exam 3: Interdependence and the Gains From Trade

A farmer has the ability to grow either corn or cotton or some combination of the two.Given no other information,it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

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

Which of the following would not result from all countries specializing according to the principle of comparative advantage?

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

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

Figure 3-3 -Refer to Figure 3-3.Suppose Fred spends half of his time producing ballet slippers and the other half of his time producing tap shoes.Ginger divides her time the same way.Then

Table 3-5 -Refer to Table 3-5.The opportunity cost of 1 airplane for the United States is

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,while Sandy can make 6 tables or 18 chairs.Given this,we know that

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 5 bushels of corn or 50 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.If the two countries do not trade,Cornland will produce and consume 400 bushels of corn and 100 bushels of oats,while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats.If each country made the decision to specialize in producing the good for which it has a comparative advantage,then the combined yearly output of the two countries would increase by

Figure 3-1 -Refer to Figure 3-1.Suppose Cliff must work 5 hours to produce each bushel of corn.Then Cliff

Use the accompanying table to answer the following questions: Table 3-6 -Refer to Table 3-6.The opportunity cost of 1 unit of bread in Spain is

What must be given up to obtain an item is called

For a country producing two goods,the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

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.Barney has a comparative 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.Suppose Country A decides to increase its production of corn by three bushels.What is the opportunity cost of this decision?

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.The opportunity cost of 1 pie for Betty is

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

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn,then

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