Question 1

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

Accepted Answer

A)  Ken has an absolute advantage in chairs.
B)  Ken has a comparative advantage in tables.
C)  Traci has an absolute advantage in chairs.
D)  Traci has a comparative advantage in chairs.E) A) and C)
F) A) and B)

Question 2

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier  
-Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Accepted Answer

A)  2 pies and 25 tarts
B)  10 pies and 22 tarts
C)  12 pies and 15 tarts
D)  15 pies and 16 tartsE) B) and C)
F) None of the above

Question 3

Trade between countries

Accepted Answer

A)  allows each country to consume at a point outside its production possibilities frontier.
B)  limits a country's ability to produce goods and services on its own.
C)  must benefit both countries equally; otherwise, trade is not mutually beneficial.
D)  can best be understood by examining the countries' absolute advantages.E) None of the above
F) C) and D)

Question 4

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?

Accepted Answer

A)  Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
B)  Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
C)  Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
D)  Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.E) B) and D)
F) A) and B)

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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. 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

Accepted Answer

A)  4 pounds of pork and 6 pounds of tomatoes.
B)  6 pounds of pork and 8 pounds of tomatoes.
C)  4 pounds of pork and 8 pounds of tomatoes.
D)  6 pounds of pork and 6 pounds of tomatoes.E) C) and D)
F) A) and B)

Question 7

​Table 3-38 
-​Refer to Table 3-38. Iowa and Nebraska can both produce corn and soybeans, and can switch between the production of corn and soybeans at a constant rate. The table illustrates the amount of corn and soybeans each state can produce in one growing season. From this table, we can conclude that Iowa should specialize in the production of

Accepted Answer

A)  ​both goods and Nebraska should specialize in the production of neither good.
B)  ​neither good and Iowa should specialize in the production of both goods.
C)  ​corn and Nebraska should specialize in the production of soybeans.
D)  ​soybeans and Nebraska should specialize in the production of corn.E) A) and B)
F) A) and C)

Question 8

Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?

Accepted Answer

A)  One individual's production possibilities frontier is steeper than the other individual's production possibilities frontier.
B)  One individual is faster at both activities than the other individual.
C)  One individual's opportunity costs are the same as the other individual's opportunity costs.
D)  None of the above is correct; one of the two individuals always will have a comparative advantage in at least one of the two activities.E) A) and B)
F) None of the above

Question 9

Table 3-41
​
​ 
-Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing compasses?

Accepted Answer

The answer of Table 3-41
​
​ 
-Refer to Table 3-41. If...

Question 10

Adam Smith developed the theory of comparative advantage as we know it today.

Accepted Answer

A) True 
 B)False

Question 11

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 Miguel is

Accepted Answer

A)  1/2 toaster.
B)  1/2 hour of labor.
C)  2 toasters.
D)  8 hours of labor.E) None of the above
F) All of the above

Question 12

Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?

Accepted Answer

Absolute advantage refers to productivit...

Question 13

Table 3-15
​  ​
-Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Accepted Answer

A)  1 pound of meat and 7 pounds of potatoes.
B)  2 pounds of meat and 5 pounds of potatoes.
C)  3 pounds of meat and 3 pounds of potatoes.
D)  4 pounds of meat and 2 pounds of potatoes.E) None of the above
F) All of the above

Question 14

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. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring cheese along the horizontal axis, then

Accepted Answer

A)  the slope of England's production possibilities frontier would be -0.67 and the slope of Spain's production possibilities frontier would be -0.5.
B)  the slope of England's production possibilities frontier would be -1.5 and the slope of Spain's production possibilities frontier would be -2.
C)  the slope of England's production possibilities frontier would be -.75 and the slope of Spain's production possibilities frontier would be -1.
D)  the slope of England's production possibilities frontier would be -2 and the slope of Spain's production possibilities frontier would be -.5.E) A) and B)
F) A) and C)

Question 15

Table 3-17
The following table contains some production possibilities for an economy for a given year. 
-Refer to Table 3-17. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  180.
B)  200.
C)  220
D)  240.E) None of the above
F) All of the above

Question 16

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. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Accepted Answer

A)  5 units of cheese and 3 units of bread.
B)  6 units of cheese and 4 units of bread.
C)  8 units of cheese and 3 units of bread.
D)  7 units of cheese and 2 units of bread.E) All of the above
F) C) and D)

Question 17

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.E) All of the above
F) A) and C)

Question 18

Table 3-7
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
​ 
-Refer to Table 3-7. Assume that the farmer and the rancher each has 24 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

Accepted Answer

A)  6 pounds of meat and 4.5 pounds of potatoes.
B)  5.5 pounds of meat and 8 pounds of potatoes.
C)  12 pounds of meat and 9 pounds of potatoes.
D)  5 pounds of meat and 5.5 pounds of potatoes.E) B) and C)
F) None of the above

Question 19

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26. If Mary and Kate trade foods with each other, who will trade away muffins in exchange for cookies?

Accepted Answer

Because Mary has a comparative...

Question 20

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier  
-Refer to Figure 3-6. If the production possibilities frontier shown for Maxine is for 3 hours of work, then how long does it take Maxine to make one pie?

Accepted Answer

A)  1/4 hour
B)  1/3 hour
C)  3 hours
D)  4 hoursE) C) and D)
F) B) and D)

Exam 3: Interdependence and the Gains From Trade

Table 3-17 The following table contains some production possibilities for an economy for a given year. -Refer to Table 3-17. If the production possibilities frontier is bowed outward, then "?" could be

Correct Answer
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Adam Smith developed the theory of comparative advantage as we know it today.

Correct Answer
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Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?

Correct Answer
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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

Correct Answer
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Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. If Mary and Kate trade foods with each other, who will trade away muffins in exchange for cookies?

Correct Answer
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Because Mary has a comparative...
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Correct Answer
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Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?

Correct Answer
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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 Miguel is

Correct Answer
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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. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Correct Answer
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Table 3-41 -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing compasses?

Correct Answer
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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.

Correct Answer
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Table 3-15 -Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Correct Answer
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Trade between countries

Correct Answer
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Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?

Correct Answer
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Absolute advantage refers to productivit...
View Answer

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6. If the production possibilities frontier shown for Maxine is for 3 hours of work, then how long does it take Maxine to make one pie?

Correct Answer
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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

Correct Answer
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Correct Answer
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Correct Answer
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Exam 3: Interdependence and the Gains From Trade

Table 3-17 The following table contains some production possibilities for an economy for a given year. -Refer to Table 3-17. If the production possibilities frontier is bowed outward, then "?" could be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Adam Smith developed the theory of comparative advantage as we know it today.

Correct AnswerverifiedShow Answer

Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. If Mary and Kate trade foods with each other, who will trade away muffins in exchange for cookies?

Correct AnswerverifiedBecause Mary has a comparative...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?

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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 Miguel is

Correct AnswerverifiedShow Answer

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. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Correct AnswerverifiedShow Answer

Table 3-41 ​ ​ -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing compasses?

Correct AnswerverifiedShow Answer

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.

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Table 3-15 ​ ​ -Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Correct AnswerverifiedShow Answer

Trade between countries

Correct AnswerverifiedShow Answer

Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?

Correct AnswerverifiedAbsolute advantage refers to productivit...View AnswerShow Answer

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6. If the production possibilities frontier shown for Maxine is for 3 hours of work, then how long does it take Maxine to make one pie?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Because Mary has a comparative...
View Answer

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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 Miguel is

Correct Answer
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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. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Correct Answer
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Table 3-41 -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing compasses?

Correct Answer
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Correct Answer
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Table 3-15 -Refer to Table 3-15. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Correct Answer
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Correct Answer
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Correct Answer
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Absolute advantage refers to productivit...
View Answer

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