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

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20.Canada would incur an opportunity cost of 6 units of Good X if it increased its production of Good Y by

A person can benefit from specialization and trade by obtaining a good at a price that is

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 5 televisions per year.Each nation has 100 workers,and each country specializes according to the principle of comparative advantage.If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year,then each country's maximum consumption of new radios and televisions per year will be

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21.Suppose Uzbekistan decides to increase its production of bolts by 10.What is the opportunity cost of this decision?

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

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

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 X will increase by

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17.If Maxine and Daisy switch from each person dividing her time equally between the production of pies and tarts to each person spending all of her time producing the good in which she has a comparative advantage,then total production of tarts will increase by

Assume for Brazil that the opportunity cost of each cashew is 100 peanuts.Which of these pairs of points could be on Brazil's production possibilities frontier?

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18.Suppose Juba is willing to trade one bowl to Bintu for every two cups that Bintu makes and sends to Juba.Which of the following combinations of bowls and cups could Bintu then consume,assuming Bintu specializes in making cups and Juba specializes in making bowls?

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year,and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.Each nation has 10 workers.Without trade,Freedonia produces and consumes 30 units of corn and 10 units of wheat per year.Sylvania produces and consumes 10 units of corn and 30 units of wheat.Suppose that trade is then initiated between the two countries,and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat.Freedonia will now be able to consume a maximum of

Ken and Traci are two woodworkers who both make tables and chairs.In one month,Ken can make 3 tables or 18 chairs,whereas Traci can make 8 tables or 24 chairs..Given this,we know that

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15.Perry should specialize in the production of

Figure 3-24 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. -Refer to Figure 3-24.Bob has

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20.Canada's opportunity cost of one unit of Good X 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.Which of the following prices would result in an mutually advantageous trade for Alice and Betty?

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18.Bintu has a comparative advantage in the production of

Suppose a gardener produces both tomatoes and squash in his garden.If the opportunity cost of one bushel of squash is 2/5 bushel of tomatoes,then the opportunity cost of 1 bushel of tomatoes is