Exam 3: Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Both Dave and Caroline produce sweaters and socks.If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks,then

If Shawn can produce donuts at a lower opportunity cost than Sue,then

When describing the opportunity cost of two producers,economists use the term

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17.At which of the following prices would both Maxine and Daisy gain from trade with each other?

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year,and a worker in Teeveeland can produce either 2 radios or 4 televisions per year.Each nation has 100 workers.Also suppose that each country completely specializes in producing the good in which it has a comparative advantage.If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year,then each country's maximum consumption of new radios and televisions per year will be

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17.Maxine has an absolute advantage in the production of

Which of the following statements is not correct?

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?

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21.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

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars.Also assume that Germany has an absolute advantage in both fish and cars.If these two countries specialize and trade so as to maximize the benefits of specialization and trade,then

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20.At which of the following prices would both Canada and Mexico gain from trade with each other?

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19.Chile's opportunity cost of one pound of soybeans is

The principle of comparative advantage does not provide answers to certain questions.One of those questions is

Figure 3-23 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 3-23.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

Suppose that the country of Xenophobia chose to isolate itself from the rest of the world.Its ruler proclaimed that Xenophobia should become self-sufficient,so it would not engage in foreign trade.From an economic perspective,this idea would

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20.If Canada and Mexico switch from each country dividing its time equally between the production of Good X and Good Y to each country spending all of its time producing the good in which it has a comparative advantage,then total production of Good Y will increase by

The principle of comparative advantage does not provide answers to certain questions.One of those questions is

Figure 3-22 Alice and Betty's Production Possibilities in one 8-hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-22.What are Alice and Betty's opportunity costs of 1 pizza?

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15.Perry has an absolute advantage in the production of

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16.Hosne's opportunity cost of one wallet is