Exam 3: Interdependence and the Gains From Trade

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. Which of the following combinations of coolers and radios could Aruba produce in one 40- hour week?

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

Table 3-3 Production Opportunities -Refer to Table 3-3. Which of the following combinations of cheese and wine could France produce in 40 hours?

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

Figure 3-12 Argentina's Production Possibilities Frontier Peru's Production Possibilities Frontier -Refer to Figure 3-12. If Argentina and Peru each divides its time equally between producing corn and fish, then total production is

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

Adam Smith wrote that a person should never attempt to make at home what it will cost him more to make than to buy.