Question 1

Figure 3-19
Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier 
-Refer to Figure 3-19. Colombia would incur an opportunity cost of 24 pounds of coffee if it increased its production of soybeans by

Accepted Answer

A)  12 pounds. 
B)  18 pounds. 
C)  36 pounds. 
D)  48 pounds.

Question 2

Differences in opportunity cost allow for gains from trade.

Accepted Answer

A) True 
 B)False

Question 3

Table 3-20
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-20. What is Brad's opportunity cost of producing one bushel of wheat?

Accepted Answer

A)  5/6 pound of beef 
B)  6/5 pounds of beef 
C)  3/5 pounds of beef 
D)  5/3 pounds of beef

Question 4

Table 3-31
 
-Refer to Table 3-31. For the farmer, the opportunity cost of 1 pound of meat is

Accepted Answer

A)  0.625 pound of potatoes. 
B)  1.6 pounds of potatoes. 
C)  5 pounds of potatoes. 
D)  8 pounds of potatoes.

Question 5

Figure 3-17
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier
 
-Refer to Figure 3-17. Daisy has an absolute advantage in the production of

Accepted Answer

A)  both goods and a comparative advantage in the production of pies. 
B)  both goods and a comparative advantage in the production of tarts. 
C)  neither good and a comparative advantage in the production of pies. 
D)  neither good and a comparative advantage in the production of tarts.

Question 6

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is

Accepted Answer

A)  1/6 table for Ken and 1/3 table for Traci. 
B)  1/6 table for Ken and 3 tables for Traci. 
C)  6 tables for Ken and 1/3 table for Traci. 
D)  6 tables for Ken and 3 tables for Traci.

Question 7

Table 3-20
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-20. Assume that Brad and Theresa each has 60 minutes available. If each person spends all his or her time producing the good in which he or she has a comparative advantage, then total production is

Accepted Answer

A)  6 bushels of wheat and 6 pounds of beef. 
B)  10 bushels of wheat and 5 pounds of beef. 
C)  10 bushels of wheat and 6 pounds of beef. 
D)  6 bushels of wheat and 5 pounds of beef.

Question 8

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?

Accepted Answer

A)  1/5 units of bananas per unit of rice. 
B)  1/3 units of bananas per unit of rice. 
C)  3/5 units of bananas per unit of rice. 
D)  None of the above.

Question 9

Figure 3-5
Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier 
-Refer to Figure 3-5. If Hosne and Merve each divides her time equally between making purses and making wallets, then total production is

Accepted Answer

A)  4 purses and 8 wallets. 
B)  7 purses and 7 wallets. 
C)  10 purses and 6 wallets. 
D)  14 purses and 14 wallets.

Question 10

International trade may make some individuals in a nation better off, while other individuals are made worse off.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not correct?

Accepted Answer

A)  The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good. 
B)  The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X. 
C)  The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good. 
D)  The gains from specialization and trade are based not on comparative advantage but on absolute advantage.

Question 12

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 farmer is

Accepted Answer

A)  1/2 pound of tomatoes. 
B)  1/2 hour of labor. 
C)  2 pounds of tomatoes. 
D)  2 hours of labor.

Question 13

Table 3-31
 
-Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Accepted Answer

A)  4.0 pounds of potatoes. 
B)  5.2 pounds of potatoes. 
C)  6.4 pounds of potatoes. 
D)  9.6 pounds of potatoes.

Question 14

Figure 3-17
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier
 
-Refer to Figure 3-17. Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in making tarts?

Accepted Answer

A)  4 pies and 6 tarts 
B)  6 pies and 5 tarts 
C)  8 pies and 3 tarts 
D)  10 pies and 1.5 tarts

Question 15

Figure 3-5
Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier 
-Refer to Figure 3-5. If Hosne must work 0.5 hour to make each purse, then her production possibilities frontier is based on how many hours of work?

Accepted Answer

A)  2 hours 
B)  5 hours 
C)  20 hours 
D)  50 hours

Question 16

As long as two people have different opportunity costs, each can gain from trade with the other, since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Accepted Answer

A) True 
 B)False

Question 17

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. The opportunity cost of 1 mixer for Maya is

Accepted Answer

A)  0.625 toasters. 
B)  5 hours of labor. 
C)  1.6 toasters. 
D)  20 hours of labor.

Question 18

Figure 3-9
Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier 
-Refer to Figure 3-9. If the production possibilities frontiers shown are each for two days of production, then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together make in a given 2- day production period?

Accepted Answer

A)  12 bolts and 120 nails 
B)  24 bolts and 96 nails 
C)  38 bolts and 50 nails 
D)  44 bolts and 24 nails

Question 19

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

Accepted Answer

A) True 
 B)False

Question 20

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. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

Accepted Answer

A)  Alice's opportunity cost of 1 pitcher of lemonade is 1/2 of a pizza and Betty's opportunity cost of 1 pitcher of lemonade is 2/3 of a pizza. 
B)  Alice's opportunity cost of 1 pitcher of lemonade is 2 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 1.5 pizzas. 
C)  Alice's opportunity cost of 1 pitcher of lemonade is 10 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 10 pizzas. 
D)  Alice's opportunity cost of 1 pitcher of lemonade is 200 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 300 pizzas.

Exam 3: Interdependence and the Gains From Trade

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Colombia would incur an opportunity cost of 24 pounds of coffee if it increased its production of soybeans by

Differences in opportunity cost allow for gains from trade.

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. What is Brad's opportunity cost of producing one bushel of wheat?

Table 3-31 -Refer to Table 3-31. For the farmer, the opportunity cost of 1 pound of meat is

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Daisy has an absolute advantage in the production of

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair 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?

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne and Merve each divides her time equally between making purses and making wallets, then total production is

International trade may make some individuals in a nation better off, while other individuals are made worse off.

Which of the following is not 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 farmer is

Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne must work 0.5 hour to make each purse, then her production possibilities frontier is based on how many hours of work?

As long as two people have different opportunity costs, each can gain from trade with the other, since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

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. The opportunity cost of 1 mixer for Maya is

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

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. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

Exam 3: Interdependence and the Gains From Trade

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Colombia would incur an opportunity cost of 24 pounds of coffee if it increased its production of soybeans by

Differences in opportunity cost allow for gains from trade.

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. What is Brad's opportunity cost of producing one bushel of wheat?

Table 3-31 -Refer to Table 3-31. For the farmer, the opportunity cost of 1 pound of meat is

Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Daisy has an absolute advantage in the production of

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair 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?

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne and Merve each divides her time equally between making purses and making wallets, then total production is

International trade may make some individuals in a nation better off, while other individuals are made worse off.

Which of the following is not 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 farmer is

Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If Hosne must work 0.5 hour to make each purse, then her production possibilities frontier is based on how many hours of work?

As long as two people have different opportunity costs, each can gain from trade with the other, since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

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. The opportunity cost of 1 mixer for Maya is

If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.

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. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

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. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?