Exam 3: Interdependence and the Gains From Trade

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9. If the production possibilities frontiers shown are each for two days of production, then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together make in a given 2- day production period?

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

The principle of comparative advantage does not provide answers to certain questions. One of those questions is

Table 3-38 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-38. England should export

Define absolute advantage.

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan switch from each person dividing their time equally between the production of novels and poems to each person spending all of their time producing the good in which they have a comparative advantage, then total production of novels will increase by

Ellie and Brendan both produce apple pies and vanilla ice cream. If Ellie's opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan's opportunity cost of one apple pie is 1/4 gallon of ice cream, Ellie has a comparative advantage in the production of ice cream.

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. Which of the following is not correct?

Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-25. Miguel has an absolute advantage in the production of

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Suppose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan. Which of the following combinations of bolts and nails could Uzbekistan then consume, assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

Table 3-6 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-6. Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. Assume that England and Spain each has 24 labor hours available. If each country divides its time equally between the production of cheese and bread, then total production is

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Japan has an absolute advantage in the production of

Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one umbrella?

Unless two people who are producing two goods have exactly the same opportunity costs, then one person will have a comparative advantage in one good, and the other person will have a comparative advantage in the other good.

Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could

Table 3-36 -Refer to Table 3-36. Antigua has an absolute advantage in the production of