Exam 3: Interdependence and the Gains From Trade

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.Without trade,Japan produced and consumed 50 cars and 6 airplanes and Korea produced and consumed 27 cars and 7 airplanes.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 28 cars for 8 airplanes.As a result,Japan gained

Figure 3-4 -Refer to Figure 3-4.If the production possibilities frontier shown for Perry is for 6 months of writing,then how long does it take Perry to write one poem?

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain.If we were to do this,measuring bread along the horizontal axis,then

Figure 3-5 -Refer to Figure 3-5.Hosne's opportunity cost of one purse is

Table 3-12 -Refer to Table 3-1.For the farmer,12.8 pounds of

Timmy can edit 2 pages in one minute and he can type 80 words in one minute.Olivia can edit 1 page in one minute and she can type 100 words in one minute.Timmy has an absolute advantage and a comparative advantage in editing,while Olivia has an absolute advantage and a comparative advantage in typing.

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.What is Andia's opportunity cost of producing one pound of beef?

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,while Sandy can make 6 tables or 18 chairs.Given this,we know that

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

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

Figure 3-8 -Refer to Figure 3-8.If Chile and Colombia each spends all of its time producing the good in which it has a comparative advantage and the countries agree to trade 7 pounds of coffee for 5 pounds of soybeans,then Chile will consume

Figure 3-4 -Refer to Figure 3-4.If Jordan must work 3 months to write each novel,then her production possibilities frontier is based on how many months of work?

Julia can fix a meal in 1 hour,and her opportunity cost of one hour is $50.Jacque can fix the same kind of meal in 2 hours,and his opportunity cost of one hour is $20.Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

For both parties to gain from trade,the price at which they trade must lie exactly in the middle of the two opportunity costs.

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds)that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.In the nation of Cropitia,the opportunity cost of a pound of cheese is 1.5 pounds of ham.Bonovia and Cropitia both can gain from trading with one another if one pound of cheese trades for

Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts.If the US exports semiconductors to Mexico and imports auto parts from Mexico,

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

Figure 3-5 -Refer to Figure 3-5.Merve should specialize in the production of

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.Andia has an absolute advantage in the production of

Figure 3-4 -Refer to Figure 3-4.Which of the following is not correct?