Exam 3: Interdependence and the Gains From Trade

It takes Heather 1 hour to change the oil in the car and 20 minutes to do the dishes. It takes Zach 1.5 hours to change the oil in the car. For Zach to have a comparative advantage changing the oil it must take him more than minutes to do the dishes.

Table 3-18 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-18. If the production possibilities frontier is bowed outward, then "?" could be

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. 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?

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

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7. If Bintu and Juba both spend all of their time making bowls, then total production is

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. Maya has an absolute advantage in the production of

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

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. 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

Define comparative advantage.

Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Suppose Zimbabwe decides to increase its production of toothbrushes by 10. What is the opportunity cost of this decision?

A production possibilities frontier is a straight line when

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Suppose Maxine decides to increase her production of tarts by 5. What is the opportunity cost of this decision?

Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?

Differences in opportunity cost allow for gains from trade.

Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Which of the following is not correct?

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 table is

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil produce in two months?

A production possibilities frontier is a graph that shows the combination of outputs that an economy should produce.

Which of the following is not a reason people choose to depend on others for goods and services?