Exam 3: Interdependence and the Gains From Trade

Use the following Figure to answer the question : Figure 3-24 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-24. Bob has

Use the following Figure to answer the question : Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Suppose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan. Which of the following combinations of bolts and nails could Uzbekistan then consume, assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

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 the opportunity cost of 1 table is

Mark can produce 24 footballs or 48 basketballs in 8 hours. Maria can produce 64 basketballs in 8 hours. In order for Maria to have a comparative advantage producing basketballs, the number of footballs she can produce in 8 hours has to be less than .

Sally can make 8 cups of soup per hour or 20 crackers per hour. Harry can make 10 cups of soup per hour or 30 crackers per hour. Can Sally and Harry gain from trade? If so, what is the range of prices of crackers for soup at which they would both find trade advantageous?

Use the following Figure to answer the question : Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile would incur an opportunity cost of 36 pounds of coffee if it increased its production of soybeans by

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Jennifer takes 2 hours to make a loaf of bread and 1 hour to make a dozen cookies. Janet takes 3 hours to make a loaf of bread and 3/4 hours to make a dozen cookies. Who, if either, has an absolute advantage baking bread? Who, if either, has an absolute advantage making cookies?

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Define comparative advantage.

Use the following scenario to answer the question : Scenario 3-1 The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time. Greg's Production Possibilities Catherine's Production Possibilities -Refer to Scenario 3-1. What is Catherine's opportunity cost of producing cake? Explain how you derived your answer.

Use the following Table to answer the question : Table 3-13 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. -Refer to Table 3-13. The number of minutes needed by Juanita to program a cellular phone is

Use the following Table to answer the question : Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-25. The opportunity cost of 1 toaster for Miguel is

Use the following Figure to answer the question : Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Hosne's opportunity cost of one purse is

Use the following Figure to answer the question : Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

Use the following Table to answer the question : Table 3-36 -Refer to Table 3-36. What is Antigua's opportunity cost of one umbrella?

In which of the following cases should the United States produce more noodles than it wants for its own use and trade some of those noodles to Italy in exchange for wine?

Use the following Table to answer the question : Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one towel?

For international trade to benefit a country, it must benefit all citizens of that country.

Use the following Figure to answer the question : Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. If Chile and Colombia switch from each country dividing its time equally between the production of coffee and soybeans to each country spending all of its time producing the good in which it has a comparative advantage, then total production of soybeans will increase by