Exam 3: Interdependence and the Gains From Trade

A person can benefit from specialization and trade by obtaining a good at a price that is

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Jordan is

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. Zimbabwe's opportunity cost of one hairbrush is

Table 3-41 -Refer to Table 3-41. Which country has a comparative advantage in producing radios?

Table 3-36 -Refer to Table 3-36. What is Antigua's opportunity cost of one towel?

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. Canada's opportunity cost of one unit of Good X is

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

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. Assume that Max and Min each has 36 labor hours available. If each person divides his/her time equally between the production of mittens and hats, then total production is

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9. If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails, then total production is

Table 3-34 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-34. At which of the following prices, if any, can India and Indonesia both gain from trade?

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. Given this information, Chris's opportunity cost of 1 lb. of tomatoes is

Table 3-36 -Refer to Table 3-36. Assume that Antigua and Barbuda each has 60 minutes available. If each island spends all its time producing the good in which it has a comparative advantage, then total production is

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

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 an absolute advantage producing broccoli? Defend your answer.

Table 3-30 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-30. Varick has a comparative advantage in the production of

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. At which of the following prices would both Hosne and Merve gain from trade with each other?

If Wrex can produce more math problems per hour and more book reports per hour than Maxine can, then Wrex cannot gain from trading math problems and book reports with Maxine.

If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self- sufficient.

The opportunity cost of an item is