Exam 3: Interdependence and the Gains From Trade

Table 3-5 -Refer to Table 3-5.What is the opportunity cost of one airplane for Canada

Figure 3-2 -Refer to Figure 3-2.What is the opportunity cost of 1 bushel of wheat for Cliff

Figure 3-4 -Refer to Figure 3-4.For Jerry,what is the opportunity cost of one bottle of wine

Figure 3-2 -Refer to Figure 3-2.What do the two producers have an absolute advantage in

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.

Figure 3-1 -Refer to Figure 3-1.What do the two producers have a comparative advantage in

What is the term for a good that is produced abroad and sold domestically

What is comparative advantage based on

Table 3-4 -Refer to the table.What is the opportunity cost of one basket for Alberta

Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5.If Fred and Ginger both specialize in the good in which they have a comparative advantage,what would the total consumption be

Which of the following does trade NOT allow for

Unless two people who are producing two goods have exactly the same opportunity costs,each will have a comparative advantage in a different good.

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

Suppose that a worker in Freedonia can produce either 6 units of corn or 4 units of wheat per year,and a worker in Sylvania can produce either 4 units of corn or 6 units of wheat per year.Each nation has 10 workers.For many years the two countries traded,each completely specializing in producing the grain for which it has a comparative advantage.Now,however,war has broken out between them and all trade has stopped.Without trade,Freedonia produces and consumes 30 units of corn and 20 units of wheat per year.Sylvania produces and consumes 20 units of corn and 30 units of wheat.By how much has the combined yearly output of the two countries declined

Suppose a producer requires a smaller quantity of inputs to produce carrots than to produce onions.Is this information sufficient to determine in which good the producer has a comparative advantage

Table 3-5 -Refer to Table 3-5.Which country has a comparative advantage in each product

Figure 3-6 These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. -Refer to Figure 3-6.If Barney and Betty both specialize in the good in which they have a comparative advantage,what would the total production be

Figure 3-6 These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. -Refer to Figure 3-6.What is the opportunity cost of one pie for Betty

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

Table 3-5 -Refer to Table 3-5.What is the opportunity cost of one car for Japan