Question 1

Figure 3-21
Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier 
-Refer to Figure 3-21. Azerbaijan's opportunity cost of one bolt is

Accepted Answer

A)  1/4 nail and Uzbekistan's opportunity cost of one bolt is 1/2 nail. 
B)  1/4 nail and Uzbekistan's opportunity cost of one bolt is 2 nails. 
C)  4 nails and Uzbekistan's opportunity cost of one bolt is 1/2 nail. 
D)  4 nails and Uzbekistan's opportunity cost of one bolt is 2 nails.

Question 2

Table 3-15
 
-Refer to Table 3-15. Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

Accepted Answer

A)  5 pounds of meat and 4 pounds of potatoes. 
B)  6 pounds of meat and 7.5 pounds of potatoes. 
C)  7.5 pounds of meat and 6 pounds of potatoes. 
D)  10 pounds of meat and 8 pounds of potatoes.

Question 3

Figure 3-21
Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier 
-Refer to Figure 3-21. Suppose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan. Which of the following combinations of bolts and nails could Azerbaijan then consume, assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

Accepted Answer

A)  8 bolts and 56 nails 
B)  14 bolts and 44 nails 
C)  18 bolts and 32 nails 
D)  20 bolts and 26 nails

Question 4

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

Accepted Answer

A)  3/5 towels 
B)  2/3 towels 
C)  3/2 towels 
D)  5/3 towels

Question 5

Table 3-36
 
-Refer to Table 3-36. Antigua has an absolute advantage in the production of

Accepted Answer

A)  towels and Barbuda has an absolute advantage in the production of umbrellas. 
B)  umbrellas and Barbuda has an absolute advantage in the production of towels. 
C)  both goods and Barbuda has an absolute advantage in the production of neither good. 
D)  neither good and Barbuda has an absolute advantage in the production of both goods.

Question 6

Figure 3-4
Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier
 
-Refer to Figure 3-4. If the production possibilities frontiers shown are each for one year of working, then which of the following combinations of jackets and sweaters could Lisa and Bryce together produce in a given year?

Accepted Answer

A)  1 sweater and 22 jackets 
B)  2 sweaters and 20 jackets 
C)  4 sweaters and 12 jackets 
D)  5 sweaters and 7 jackets

Question 7

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. Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes?

Accepted Answer

A)  1 toothbrush and 4 hairbrushes 
B)  4 toothbrushes and 2 hairbrushes 
C)  5 toothbrushes and 6 hairbrushes 
D)  6 toothbrushes and 5 hairbrushes

Question 8

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Accepted Answer

The answer of With eight hours of work Elmer can...

Question 9

Henry can make a bird house in 3 hours and he can make a bird feeder in 1 hour. The opportunity cost to Henry of making a bird house is 1/3 bird feeder.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Table 3-21
Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day.
 
-Refer to Table 3-21. At which of the following prices would both Jamaica and Norway gain from trade with each other?

Accepted Answer

A)  1 radio for 1 cooler 
B)  1 radio for 4 coolers 
C)  1 radio for 10 coolers 
D)  Jamaica and Norway would both gain from trade at all of the above prices.

Question 12

Table 3-29
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
 
-Refer to Table 3-29. Juanita's opportunity cost of programming one cellular phone is testing

Accepted Answer

A)  7.5 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 5/2 cellular phones. 
B)  2/15 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 5/2 cellular phones. 
C)  7.5 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 2/5 cellular phones. 
D)  2/15 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 2/5 cellular phones.

Question 13

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 represents Aruba's production possibilities frontier when 100 labor hours are available?

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 14

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 a comparative advantage producing broccoli? Defend your answer using the numbers given.

Accepted Answer

The answer of Scenario 3-2
In country A a worker who...

Question 15

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. Which of the following represents Zimbabwe's and Portugal's production possibilities frontiers when each country has 60 minutes of machine time available?

Accepted Answer

A)  Zimbabwe Portugal 
B)  Zimbabwe Portugal..
 
C)  Zimbabwe Portugal
 
D)  Zimbabwe Portugal.

Question 16

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. The opportunity cost of 1 parasol for Min is

Accepted Answer

A)  1/3 plate. 
B)  1/2 plate. 
C)  2 plates. 
D)  3 plates.

Question 17

Suppose a gardener produces both tomatoes and squash in his garden. If the opportunity cost of one bushel of squash is 2/5 bushel of tomatoes, then the opportunity cost of 1 bushel of tomatoes is

Accepted Answer

A)  2/5 bushel of squash. 
B)  5/2 bushels of squash. 
C)  2 bushels of squash. 
D)  5 bushels of squash.

Question 18

Table 3-8
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-8. Assume that England and Spain each has 24 labor hours available. If each country divides its time equally between the production of cheese and bread, then total production is

Accepted Answer

A)  10 units of cheese and 6 units of bread. 
B)  25 units of cheese and 7.5 units of bread. 
C)  20 units of cheese and 12 units of bread. 
D)  12 units of cheese and 8 units of bread.

Question 19

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 represents Iceland's production possibilities frontier when 100 labor hours are available?

Accepted Answer

A) 
 
B) 
 
C) 
 
D)

Question 20

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 table is

Accepted Answer

A)  1/6 chair for Ken and 1/3 chair for Traci. 
B)  1/6 chair for Ken and 3 chairs for Traci. 
C)  6 chairs for Ken and 1/3 chair for Traci. 
D)  6 chairs for Ken and 3 chairs for Traci.

Exam 3: Interdependence and the Gains From Trade

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Azerbaijan's opportunity cost of one bolt is

Table 3-15 -Refer to Table 3-15. Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

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

Table 3-36 -Refer to Table 3-36. Antigua has an absolute advantage in the production of

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. Which of the following combinations of toothbrushes and hairbrushes could Portugal produce in 30 minutes?

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Henry can make a bird house in 3 hours and he can make a bird feeder in 1 hour. The opportunity cost to Henry of making a bird house is 1/3 bird feeder.

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 3-5 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 represents Aruba's production possibilities frontier when 100 labor hours are available?

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. The opportunity cost of 1 parasol for Min is

Suppose a gardener produces both tomatoes and squash in his garden. If the opportunity cost of one bushel of squash is 2/5 bushel of tomatoes, then the opportunity cost of 1 bushel of tomatoes is

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 represents Iceland's production possibilities frontier when 100 labor hours are available?

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 table is