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Exam 3: Interdependence and the Gains From Trade

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Question 231

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Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.Suppose Peru decides to increase its production of emeralds by 2.What is the opportunity cost of this decision?

A) 30 rubies
B) 40 rubies
C) 60 rubies
D) 120 rubies

E) All of the above
F) C) and D)

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Question 232

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Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.In the nation of Cropitia,the opportunity cost of a pound of cheese is 1.5 pounds of ham.Based on this information,if Bonovia and Cropitia want to trade,Cropitia should specialize,in the production of

A) ham and import cheese.
B) cheese and import ham.
C) both goods and import neither good.
D) neither good and import both goods..

E) A) and C)
F) A) and B)

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Question 233

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Figure 3-3 Arturo’s Production Possibilities FrontierFrontier Dina’s Production Possibilities -Refer to Figure 3-3.Dina has an absolute advantage in the production of

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba's opportunity cost of one cooler is

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8.Huang has an absolute advantage in the production of

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11.Assume that Falda and Varick each has 1 hour available.If each person divides his time equally between the production of wheat and cloth,then total production is

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.What is Zardia's opportunity cost of producing one bushel of wheat?

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Azerbaijan's opportunity cost of one bolt is

Figure 3-3 Arturo’s Production Possibilities Frontier Dina’s Production Possibilities Frontier -Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

Table 3-10 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 3-10.Juanita's opportunity cost of programming one cellular phone is testing

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.The opportunity cost of 1 mixer for Miguel is

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Suppose Aruba decides to increase its production of radios by 10.What is the opportunity cost of this decision?

When can two countries gain from trading two goods?

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The opportunity cost of 1 pound of meat for the rancher is

Gary and Diane must prepare a presentation for their marketing class.As part of their presentation,they must do a series of calculations and prepare 50 PowerPoint slides.It would take Gary 10 hours to do the required calculation and 10 hours to prepare the slides.It would take Diane 12 hours to do the calculations and 20 hours to prepare the slides. a.How much time would it take the two to complete the project if they divide the calculations equally and the slides equally? b.How much time would it take the two to complete the project if they use comparative advantage and specialize in calculating or preparing slides? c.If Diane and Gary have the same opportunity cost of $5 per hour,is there a better solution than for each to specialize in calculating or preparing slides?

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Frontier Azerbaijan’s Production Possibilities -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 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.Assume that the farmer and the rancher each has 24 labor hours available.If each person spends all his time producing the good in which he has a comparative advantage,then total production is

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour.Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour.Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Figure 3-5 Hosne’s Production Possibilities Frontier Merve’s Production Possibilities Frontier -Refer to Figure 3-5.At which of the following prices would both Hosne and Merve gain from trade with each other?