Exam 3: Interdependence and the Gains From Trade

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4. Which of the following combinations of meat and potatoes could the farmer produce in 24 hours?

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20. Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

Figure 3-5 -Refer to Figure 3-5. If Hosne must work 0.5 hour to make each purse, then her production possibilities frontier is based on how many hours of work?

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7. Assume that Japan and Korea each has 2400 hours available. If each country spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 cars for 6 airplanes, then

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5. The opportunity cost of 1 unit of cheese for England is

Figure 3-9 -Refer to Figure 3-9. Suppose Azerbaijan decides to increase its production of nails by 20. What is the opportunity cost of this decision?

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4. Assume that the farmer and the rancher each has 24 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage, then total production is

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2. Iceland should export

Figure 3-4 -Refer to Figure 3-4. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8. Huang has an absolute advantage in the production of

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5. Which of the following combinations of cheese and bread could Spain produce in 40 hours?

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6. The opportunity cost of 1 mixer for Miguel is

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2. At which of the following prices would both Aruba and Iceland gain from trade with each other?

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8. Assume that Huang and Min each has 36 labor hours available. If each person divides his/her time equally between the production of parasols and plates, then total production is

Figure 3-8 -Refer to Figure 3-8. Chile has an absolute advantage in the production of

Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that

A person can benefit from specialization and trade by obtaining a good at a price that is

Figure 3-6 -Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Figure 3-4 -Refer to Figure 3-4. Perry should specialize in the production of

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin. Fred and Barney both gain from the exchange. We can conclude that, for Barney, the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.