Exam 3: Interdependence and the Gains From Trade

Economists generally support

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Varick has an absolute advantage in the production of

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.Huang has an absolute advantage in the production of

Figure 3-3 -Refer to Figure 3-3.Arturo has an absolute advantage in the production of

Trade can make everybody better off because it

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin.Fred and Barney both gain from the exchange.We can conclude that,for Barney,the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.

Table 3-7 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-7.We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea.If we were to do this,measuring airplanes along the horizontal axis,then

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.The opportunity cost of 1 plate for Huang is

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?

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones.Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate.The following table applies. -Refer to Table 3-10.Which of the following points would be on Shantala's production possibilities frontier,based on a 40-hour week?

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

Figure 3-6 -Refer to Figure 3-6.Daisy has an absolute advantage in the production of

When there are two people and each is capable of producing two goods,it is possible for one person to have a comparative advantage over the other in both goods.

An economy can produce at any point on or inside its production possibilities frontier,but it cannot produce at points outside its production possibilities frontier.

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Assume that Falda and Varick each has 1 hour available.If each person divides his time equally between the production of wheat and cloth,then total production is

Figure 3-9 -Refer to Figure 3-9.Uzbekistan should specialize in the production of

As long as two people have different opportunity costs,each can gain from trade with the other,since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Figure 3-5 -Refer to Figure 3-5.At which of the following prices would both Hosne and Merve gain from trade with each other?

Figure 3-9 -Refer to Figure 3-9.Without trade,Uzbekistan produced and consumed 12 bolts and 36 nails and Azerbaijan produced and consumed 14 bolts and 24 nails.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 16 bolts for 38 nails.As a result,Uzbekistan gained