Exam 3: Interdependence and the Gains From Trade

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Together, they could produce more output in total if Moira knits only sweaters and Tori knits only scarves.

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

A production possibilities frontier is a straight line when

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

Figure 3-6 -Refer to Figure 3-6. If the production possibilities frontier shown for Maxine is for 3 hours of work, then how long does it take Maxine to make one pie?

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

Figure 3-3 -Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

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 has a comparative advantage in the production of

To produce 100 bushels of wheat, Farmer A requires fewer inputs than does Farmer B. We can conclude that Farmer A has an absolute advantage over Farmer B in producing wheat.

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. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring cars along the horizontal axis, then

Figure 3-7 -Refer to Figure 3-7. 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?

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. The opportunity cost of 1 unit of cheese for Spain is

The opportunity cost of an item is

Table 3-18 Chris and Tony's Production Opportunities -Which famous economist developed the principle of comparative advantage as we know it today?

Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2. Suppose Peru decides to increase its production of emeralds by 2. What is the opportunity cost of this decision?

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. Spain should export

Ellie and Brendan both produce apple pies and vanilla ice cream. If Ellie's opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan's opportunity cost of one apple pie is 1/4 gallon of ice cream, Ellie has a comparative advantage in the production of ice cream.

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. Suppose Aruba decides to increase its production of radios by 10. What is the opportunity cost of this decision?

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