Question 1

Table 3-36 
-Refer to Table 3-36. If Antigua and Barbuda decide to trade with each other, Antigua should specialize in the production of

Accepted Answer

A)  towels and Barbuda should specialize in the production of umbrellas.
B)  umbrellas and Barbuda should specialize in the production of towels.
C)  both goods and Barbuda should specialize in the production of neither good.
D)  neither good and Barbuda should specialize in the production of both goods.E) A) and B)
F) None of the above

Question 2

Table 3-24
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
​  ​
-Refer to Table 3-24. If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese, then England will consume

Accepted Answer

A)  34 units of cheese and 2 units of bread and Spain will consume 6 units of cheese and 3 units of bread.
B)  34 units of cheese and 2 units of bread and Spain will consume 16 units of cheese and 3 units of bread.
C)  34 units of cheese and 12 units of bread and Spain will consume 6 units of cheese and 3 units of bread.
D)  34 units of cheese and 12 units of bread and Spain will consume 16 units of cheese and 3 units of bread.E) C) and D)
F) B) and C)

Question 3

​Trade does not benefit a nation if that nation has a comparative advantage in the production of that good.

Accepted Answer

A) True 
 B)False

Question 4

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.E) None of the above
F) All of the above

Question 5

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 nailsE) B) and D)
F) B) and C)

Question 6

​Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Accepted Answer

A) True 
 B)False

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 or soybeans each state can produce in one growing season. From the table we know that Iowa has a

Accepted Answer

A)  ​comparative advantage in the production of soybeans and Nebraska has a comparative advantage in the production of corn.
B)  ​comparative advantage in the production of corn and Nebraska has a comparative advantage in the production of soybeans.
C)  ​comparative advantage in both goods and Nebraska has a comparative advantage in neither good.
D)  ​comparative advantage in neither good and Nebraska has a comparative advantage in both goods.E) B) and C)
F) A) and D)

Question 8

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. Jamaica has a comparative advantage in the production of

Accepted Answer

A)  coolers and Norway has a comparative advantage in the production of radios.
B)  radios and Norway has a comparative advantage in the production of coolers.
C)  both goods and Norway has a comparative advantage in the production of neither good.
D)  neither good and Norway has a comparative advantage in the production of both goods.E) B) and D)
F) None of the above

Question 9

Which of the following is not a reason people choose to depend on others for goods and services?

Accepted Answer

A)  to improve their lives
B)  to allow them to enjoy a greater variety of goods and services
C)  to consume more of each good without working any more hours
D)  to allow people to produce outside their production possibilities frontiersE) None of the above
F) C) and D)

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. 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.E) B) and D)
F) A) and D)

Question 11

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year. Each nation has 100 workers, and each country specializes according to the principle of comparative advantage. If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year, then each country's maximum consumption of new radios and televisions per year will be

Accepted Answer

A)  higher than it would be in the absence of trade because of the gains from trade.
B)  the same as it would be in the absence of trade.
C)  less than it would be in the absence of trade because neither country is specializing in the product in which it has a comparative advantage.
D)  less than it would be in the absence of trade because Teeveeland has an absolute advantage in both goods and so it cannot benefit by trading with Radioland.E) A) and D)
F) A) and C)

Question 12

The opportunity cost of an item is

Accepted Answer

A)  the number of hours that one must work in order to buy one unit of the item.
B)  what you give up to get that item.
C)  always less than the dollar value of the item.
D)  always greater than the cost of producing the item.E) All of the above
F) A) and D)

Question 13

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 a straight line, then "?" must be

Accepted Answer

A)  180.
B)  200.
C)  220.
D)  240.E) A) and B)
F) B) and C)

Question 14

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

Accepted Answer

A)  Canada requires fewer resources than the U.S. to produce a bushel of wheat.
B)  the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.
C)  the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada.
D)  the U.S. has an absolute advantage over Canada in producing computer software.E) A) and B)
F) B) and C)

Question 15

Figure 3-20
Canada's Production Possibilities Frontier
Mexico's Production Possibilities Frontier  
-Refer to Figure 3-20. Canada's opportunity cost of one unit of Good Y is

Accepted Answer

A)  1/2 unit of Good X and Mexico's opportunity cost of one unit of Good Y is 1/2 unit of Good X.
B)  1/2 unit of Good X and Mexico's opportunity cost of one unit of Good Y is 2 units of Good X.
C)  2 units of Good X and Mexico's opportunity cost of one unit of Good Y is 1/2 unit of Good X.
D)  2 units of Good X and Mexico's opportunity cost of one unit of Good Y is 2 units of Good X.E) C) and D)
F) None of the above

Question 16

​Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good.

Accepted Answer

A) True 
 B)False

Question 17

Table 3-16
The following table contains some production possibilities for an economy for a given month. 
-Refer to Table 3-16. If the production possibilities frontier is a straight line, then "?" must be

Accepted Answer

A)  200.
B)  300.
C)  400.
D)  500.E) B) and C)
F) None of the above

Question 18

Scenario 3-1
The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time.
Greg's Production Possibilities
Catherine's Production Possibilities  
-Refer to Scenario 3-1. What is Catherine's opportunity cost of producing cake? Explain how you derived your answer.

Accepted Answer

It takes Catherine 4 hours (24...

Question 19

A production possibilities frontier is bowed outward when

Accepted Answer

A)  the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good.
B)  an economy is self-sufficient instead of interdependent and engaged in trade.
C)  the rate of tradeoff between the two goods being produced is constant.
D)  the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.E) C) and D)
F) B) and D)

Question 20

Table 3-41
​
​ 
-Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

Accepted Answer

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

Exam 3: Interdependence and the Gains From Trade

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. Canada's opportunity cost of one unit of Good Y is

Correct Answer
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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

Correct Answer
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Which of the following is not a reason people choose to depend on others for goods and services?

Correct Answer
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Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

Correct Answer
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Correct Answer
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It takes Catherine 4 hours (24...
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Correct Answer
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Correct Answer
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A production possibilities frontier is bowed outward when

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Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

Correct Answer
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Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good.

Correct Answer
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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 a straight line, then "?" must be

Correct Answer
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Trade does not benefit a nation if that nation has a comparative advantage in the production of that good.

Correct Answer
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Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Correct Answer
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The opportunity cost of an item is

Correct Answer
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Table 3-36 -Refer to Table 3-36. If Antigua and Barbuda decide to trade with each other, Antigua should specialize in the production of

Correct Answer
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Table 3-16 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-16. If the production possibilities frontier is a straight line, then "?" must be

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. Canada's opportunity cost of one unit of Good Y is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a reason people choose to depend on others for goods and services?

Correct AnswerverifiedShow Answer

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIt takes Catherine 4 hours (24...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A production possibilities frontier is bowed outward when

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Table 3-41 ​ ​ -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

Correct AnswerverifiedShow Answer

​Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good.

Correct AnswerverifiedShow Answer

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 a straight line, then "?" must be

Correct AnswerverifiedShow Answer

​Trade does not benefit a nation if that nation has a comparative advantage in the production of that good.

Correct AnswerverifiedShow Answer

​Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Correct AnswerverifiedShow Answer

The opportunity cost of an item is

Correct AnswerverifiedShow Answer

Table 3-36 -Refer to Table 3-36. If Antigua and Barbuda decide to trade with each other, Antigua should specialize in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-16 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-16. If the production possibilities frontier is a straight line, then "?" must be

Correct AnswerverifiedShow Answer

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It takes Catherine 4 hours (24...
View Answer

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Correct Answer
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Correct Answer
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Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing compasses?

Correct Answer
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Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good.

Correct Answer
verified

Correct Answer
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Trade does not benefit a nation if that nation has a comparative advantage in the production of that good.

Correct Answer
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Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

Correct Answer
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