Exam 3: Interdependence and the Gains From Trade

Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Portugal has an absolute advantage in the production of

Table 3-5 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-5. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is

Table 3-9 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-9. Which of the following combinations of mixers and toasters could Maya produce in 60 hours?

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. Originally, each country divided its time equally between the production of cars and airplanes. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of cars increased by

Adam Smith asserted that a person should never attempt to make at home

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne and Merve both spend all of their time making wallets, then total production is

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. If Chris and Tony both decide to specialize and produce only the good in which they have a comparative advantage, then

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

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

Table 3-35 -Refer to Table 3-35. Denmark's opportunity cost of producing 1dozen eggs is

Table 3-31 -Refer to Table 3-31. For the farmer, the opportunity cost of 15 pounds of meat is

The principle of comparative advantage states that, regardless of the price at which trade takes place, everyone will benefit from trade if they specialize in the production of the good for which they have a comparative advantage.

If Shawn can produce donuts at a lower opportunity cost than Sue, then

Table 3-4 Assume that Andrea and Paul can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-4. Assume that Andrea and Paul each has 480 minutes available. If each person divides his time equally between the production of wheat and beef, then total production is

Country A and country B both produce shirts and shorts. Country B has an absolute advantage producing both shirts and shorts. Is there any condition under which the two countries could gain from trade?

Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Assume that Zimbabwe and Portugal each has 60 machine minutes available. Originally, each country divided its time equally between the production of toothbrushes and hairbrushes. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output increased by

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 Bintu is

Table 3-41 -Refer to Table 3-41. What is England's opportunity cost of one radio?

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. Perry has an absolute advantage in the production of

Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 30 workers in each country. No trade occurs between the two countries. Boatland produces and consumes 75 units of wheat and 375 units of fish per year while Farmland produces and consumes 375 units of wheat and 75 units of fish per year. If trade were to occur, Boatland would trade 90 units of fish to Farmland in exchange for 80 units of wheat. If Boatland now completely specializes in fish production, how many units of fish could it now consume along with the 80 units of imported wheat?