Exam 3: Interdependence and the Gains From Trade

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Adam Smith asserted that a person should never attempt to make at home

Figure 3-9 -Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Figure 3-3 -Refer to Figure 3-3.Arturo's opportunity cost of one burrito is

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.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Figure 3-3 -Refer to Figure 3-3.Without trade,Arturo produced and consumed 240 tacos and 120 burritos and Dina produced and consumed 100 tacos and 150 burritos.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 260 tacos for 156 burritos.As a result,Arturo gained