Exam 3: Interdependence and the Gains From Trade

Suppose that Korea produces shoes and soccer balls. Which of the following is correct?

Table 3-5 -Refer to Table 3-5. Which of the following is correct?

Rusty can edit 2 pages in one minute, and can type 80 words in one minute. Emily can edit 1 page in one minute, and can type 100 words in one minute. Rusty has an absolute and comparative advantage in editing, and Emily has an absolute and comparative advantage in typing.

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods.

Table 3-6 -Refer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which product will Spain export to England?

Figure 3-2 -Refer to Figure 3-2. If Paul divides his time equally between corn and wheat, what will he be able to produce?

If there is trade, which of the following is most likely?

Mike and Sandy are two woodworkers who both make tables and chairs. In 1 month, Mike can make 4 tables or 20 chairs, where Sandy can make 6 tables or 18 chairs. What do we know?

What is the opportunity cost of an item?

Figure 3-1 -Refer to Figure 3-1. If Paul divides his time equally between corn and wheat, what will he be able to produce?

For two people who are planning to trade two different goods, each will have a comparative advantage in a different good unless,

Table 3-2 -Refer to Table 3-2. What is the opportunity cost of 1 kilogram of meat for the Farmer?

Figure 3-5 -Refer to Figure 3-5. What is the opportunity cost of 1 pair of tap shoes for Ginger?

Table 3-1 -Refer to Table 3-1. What is the opportunity cost of 1 kg of potatoes for the Farmer?

If Shawn can produce donuts at a lower opportunity cost than Sue, which of the following is correct?

It takes Barbara 3 hours to make a pie and 4 hours to make a shirt. It takes Gary 2 hours to make a pie and 5 hours to make a shirt. Barbara should specialize in making shirts and Gary should specialize in making pies, then they should trade.

Which of the following is correct regarding David Ricardo?

Figure 3-3 Ice cream is measured in kilograms. -Refer to Figure 3-3. For Ben, what is the opportunity cost of 1 kg of cones?

What is the term that means whatever must be given up to obtain an item?

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. What will happen if these two countries specialize and trade according to their comparative advantage?