Exam 3: Interdependence and the Gains From Trade

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2. If the production possibilities frontier shown is for one month of production, then which of the following combinations of emeralds and rubies could Peru not produce in a given month?

Figure 3-5 -Refer to Figure 3-5. If Hosne and Merve each divides her time equally between making purses and making wallets, then total production is

Figure 3-4 -Refer to Figure 3-4. If Perry and Jordan both spend all of their time writing poems, then total production is

Figure 3-6 -Refer to Figure 3-6. Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in making tarts?

When describing the opportunity cost of two producers, economists use the term

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. Assume that Aruba and Iceland each has 80 labor hours available. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by

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. The farmer should specialize in the production of

Trade between countries

Figure 3-7 -Refer to Figure 3-7. If the production possibilities frontiers shown are each for 4 hours of work, then which of the following combinations of bowls and cups could Bintu and Juba together not make in a given 4-hour production period?

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11. In the nation of Cropitia, the opportunity cost of a pound of cheese is 1.5 pounds of ham. Based on this information, if Bonovia and Cropitia want to trade, Bonovia should specialize in the production of

Which of the following is not an example of the principle that trade can make everyone better off?

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. The opportunity cost of 1 pound of meat for the rancher is

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2. Suppose Peru decides to increase its production of rubies by 30. What is the opportunity cost of this decision?

Figure 3-3 -Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

Figure 3-3 -Refer to Figure 3-3. Arturo and Dina would not be able to gain from trade if Dina's opportunity cost of one taco changed to

For two individuals who engage in the same two productive activities, it is impossible for one of the two individuals to

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. Min has an absolute advantage in the production of

For international trade to benefit a country, it must benefit all citizens of that country.

Adam Smith developed the theory of comparative advantage as we know it today.

A production possibilities frontier is a straight line when