Exam 3: Interdependence and the Gains From Trade

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 ham is 0.3 pounds of cheese.Bonovia and Cropitia both can gain from trading with one another if one pound of ham trades for

Figure 3-4 -Refer to Figure 3-4.The opportunity cost of 1 poem for Jordan is

Which famous economist developed the principle of comparative advantage as we know it today?

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.Which of the following statements is true?

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.Assume that Maya and Miguel each has 40 hours available.If each person divides his/her time equally between the production of mixers and toasters,then total production is

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.Assume that Zimbabwe and Portugal each has 180 machine minutes available.If each country divides its time equally between the production of toothbrushes and hairbrushes,then total production is

Figure 3-1 -Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches depends on how many chairs and couches are being produced in

Figure 3-6 -Refer to Figure 3-6.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?

Figure 3-8 -Refer to Figure 3-8.Chile and Colombia would not be able to gain from trade if Colombia's opportunity cost of one pound of soybeans changed to

Gary and Diane must prepare a presentation for their marketing class.As part of their presentation,they must do a series of calculations and prepare 50 PowerPoint slides.It would take Gary 10 hours to do the required calculation and 10 hours to prepare the slides.It would take Diane 12 hours to do the calculations and 20 hours to prepare the slides. a. How much time would it take the two to complete the project if they divide the calculations equally and the slides equally? b. How much time would it take the two to complete the project if they use comparative advantage and specialize in calculating or preparing slides? c. If Diane and Gary have the same opportunity cost of $5 per hour,is there a better solution than for each to specialize in calculating or preparing slides?

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.Suppose Japan decides to increase its production of cars by 45.What is the opportunity cost of this decision?

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 a comparative advantage in the production of

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for 40 hours of production,then how long does it take Peru to make one ruby?

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The farmer should specialize in the production of

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.Miguel has an absolute advantage in the production of

Regan grows flowers and makes ceramic vases.Jayson also grows flowers and makes ceramic vases,but Regan is better at producing both goods.In this case,trade could

Figure 3-9 -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

Table 3-18 Chris and Tony's Production Opportunities -Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.If Chris and Tony both decide to specialize and produce only the good in which they have a comparative advantage,then

The principle of comparative advantage states that,regardless of the price at which trade takes place,everyone will benefit from trade if they specialize in the production of the good for which they have a comparative advantage.

The gains from specialization and trade are based on absolute advantage.