Exam 3: Interdependence and the Gains From Trade

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Suppose Arturo is willing to trade 6 burritos to Dina for each 10 tacos that Dina produces and sends to Arturo. Which of the following combinations of tacos and burritos could Dina then consume, assuming Dina specializes in taco production and Arturo specializes in burrito production?

Table 3-41 -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing compasses?

Which of the following would not result from all countries specializing according to the principle of comparative advantage?

Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. Also assume that Germany has an absolute advantage in both fish and cars. If these two countries specialize and trade so as to maximize the benefits of specialization and trade, then

The gains from specialization and trade are based on advantage.

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

Table 3-6 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-6. Assume that Zimbabwe and Portugal each has 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is

Table 3-2 Assume that England and Holland can switch between producing milk and oats at a constant rate. -Refer to Table 3-2. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Holland. If we were to do this, measuring milk along the horizontal axis, then

Figure 3-23 The graph below represents the various combinations of ham and cheese in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-23. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

The gains from trade are

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

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. Maya 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. Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-24. Betty has

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

For both parties to gain from trade, the price at which they trade must lie exactly in the middle of the two opportunity costs.

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7. If Bintu must work 2 hours to make each cup, then her production possibilities frontier is based on how many hours of work?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. If Mary and Kate trade foods with each other, who will trade away muffins in exchange for cookies?

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. Huang has an absolute advantage in the production of

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. Who has a comparative advantage in making cookies?