Exam 3: Interdependence and the Gains From Trade

Specialization and trade are closely linked to

Table 3-11 Assume that Max and Min can switch between producing mittens and producing hats at a constant rate. -Refer to Table 3-11. Which of the following points would be on Min's production possibilities frontier, based on a 36-hour production period?

Table 3-40 -Refer to Table 3-40. Italy should specialize in the production of

Table 3-28 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. -Refer to Table 3-28. Barb has an absolute advantage in

Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

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

Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods.

If the U.S. could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor, would it necessarily follow that the U.S. should specialize in television production? Explain your answer using the concepts of comparative and or absolute advantage.

Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes. Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes. Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem.

Which of the following is not a reason people choose to depend on others for goods and services?

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

Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-24. England should specialize in the production of

Table 3-10 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-10. 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 airplanes along the horizontal axis, then

Figure 3-3 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-3. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

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. At which of the following prices would both Maya and Miguel gain from trade with each other?

Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 1 pound of meat is

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20. Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

Table 3-11 Assume that Max and Min can switch between producing mittens and producing hats at a constant rate. -Refer to Table 3-11. Which of the following points would not be on Max's production possibilities frontier, based on a 36-hour production period?

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If the production possibilities frontiers shown are each for one year of working, then which of the following combinations of jackets and sweaters could Lisa and Bryce together produce in a given year?

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Merve should specialize in the production of