Exam 3: Interdependence and the Gains From Trade

When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Assume that Japan and Korea each has 2400 hours available. If each country spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 cars for 6 airplanes, then

Which of the following statements about comparative advantage is not true?

Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Table 3-34 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-34. For which goods) does Indonesia have a comparative advantage

Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?

Table 3-12 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 3-12. The number of minutes needed by Barb to test a computer is

Scenario 3-2 In country A a worker who works 40 hours can produce 200 pounds of rice or 100 pounds of broccoli. In country B a worker who works 40 hours can produce 160 pounds of rice or 120 pounds of broccoli. -Refer to Scenario 3-2. Which country, if either, has a comparative advantage producing broccoli? Defend your answer using the numbers given.

Table 3-33 Chris and Tony's Production Opportunities -Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following prices would result in a mutually advantageous trade between Chris and Tony?

For a self-sufficient producer, the production possibilities frontier

Table 3-34 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-34. Indonesia's opportunity cost of producing bananas is

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. If Arturo and Dina switch from each person dividing their time equally between the production of tacos and burritos to each person spending all of their time producing the good in which they have a comparative advantage, then total production of burritos will increase by

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The rancher has a comparative advantage in the production of

As a student, Anne spends 40 hours per week writing term papers and completing homework assignments. On one axis of her production possibilities frontier is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. Anne's production possibilities frontier is a straight line if

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. The opportunity cost of 1 bowl for Juba is

Figure 3-22 Alice and Betty's Production Possibilities in one 8­hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-22. Which of the following statements is correct regarding absolute advantage?

Table 3-33 Chris and Tony's Production Opportunities -Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct?

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The opportunity cost of 1 pound of pork for the rancher is

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

If US workers can produce everything in less time than Mexican workers, it is not possible for the US to gain from trade with Mexico.