Exam 3: Interdependence and the Gains From Trade

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. What do we know?

Figure 3-5 -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?

What are exports?

Table 3-6 -Refer to Table 3-6. If England and Spain trade based on the principle of comparative advantage, which of the following is correct?

Figure 3-3 Ice cream is measured in kilograms. -Refer to Figure 3-3. Which of the following is correct?

What happens when countries specialize according to their comparative advantage?

Figure 3-4 -Refer to Figure 3-4. Which of the following is correct?

The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.

Figure 3-5 -Refer to Figure 3-5. Ginger has a comparative advantage in

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?

Table 3-4 -Refer to Table 3-4. What is the opportunity cost of 1 birdhouse for Manitoba?

For two people who are planning to trade, it is impossible to:

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

Jonathan can make a birdhouse in 3 hours. He can make a bird feeder in 1 hour. The opportunity cost to Jonathan of making a birdhouse is 1/3 bird feeder.

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

Figure 3-3 Ice cream is measured in kilograms. -Refer to Figure 3-3. Which of the following is correct?

Table 3-2 -Refer to Table 3-2. Which of the following is correct?

Table 3-4 -Refer to Table 3-4. What is the opportunity cost of 1 basket for Manitoba?

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 3-1 -Refer to Figure 3-1. Which of the following is true for Cliff and Paul?