Exam 3: Interdependence and the Gains From Trade

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,what is each country's maximum consumption of new radios and televisions per year

Figure 3-1 -Refer to Figure 3-1.Assume that Cliff and Paul were both producing wheat and corn,and each was dividing their time equally between the two.Then they decide to specialize in the product they have a comparative advantage in and trade 3 bushels of wheat for 3 bushels of corn.What would Cliff now be able to consume

Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have a comparative or absolute advantage in

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.What is the opportunity cost of one pair of tap shoes for Ginger

Currently,a farmer can either grow 40 bushels of wheat or 120 bushels of corn per acre.If he were able to trade 70 bushels of corn for 30 bushels of wheat,would he be better off or worse off

What is the difference between production possibilities frontiers that are bowed out and those that are linear

How does trade benefit the two parties involved

International trade may make some individuals in a nation better off,while other individuals are made worse off.

Figure 3-4 -Refer to Figure 3-4.Suppose Ben and Jerry both spend half their time producing beer and half their time producing wine.How much wine and beer does each produce

Table 3-6 -Refer to Table 3-6.What is the opportunity cost of one unit of bread in Denmark

Which of the following would NOT occur if each person specializes in the good for which they have a comparative advantage

Table 3-5 -Refer to Table 3-5.If Canada and Japan trade based on the principle of comparative advantage,what could Canada gain from importing a car

Figure 3-1 -Refer to Figure 3-1.Assume that Cliff and Paul were both producing wheat and corn,and each was dividing their time equally between the two.Then they decide to specialize in the product they have a comparative advantage in.What would happen to the total production of corn

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.Suppose Ben and Jerry were both producing at point A on their production possibilities frontier and then Ben decided he would be willing to trade 4 kg of cones to get 2 kg of ice cream from Jerry.If both decided to specialize in what they had a comparative advantage in and trade,what would be the gains from trade

Table 3-2 -Refer to Table 3-2.How could the farmer and rancher both benefit

Which of the following could benefit Canada

Which of the following is NOT an implication of our model of trade

Suppose that a worker in Taiwan can make 2 TVs or 10 pairs of shoes per week,and a worker in Korea can make 3 TVs or 20 pairs of shoes per week. a.In what sense do TVs and shoes cost less in Korea than in Taiwan b.In what sense do TVs cost less in Taiwan than in Korea c.If Taiwan and Korea were to engage in trade,which country would export which good d.How would the answer to the question in part c change if a worker in Korea could make 4 TVs per week?

Figure 3-2 -Refer to Figure 3-2.Assume that Cliff and Paul were both producing wheat and corn,and both were dividing their time equally between the two.Then they decide to specialize in the product for which they have a comparative advantage and trade 3 bushels of wheat for 3 bushels of corn.What would Cliff now be able to consume

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.