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Exam 3: Interdependence and the Gains From Trade

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Question 81

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Table 3-37 ​ -​Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Sarah has an absolute advantage in

A) ​the production of vases and a comparative advantage in the production of vases.
B) ​the production of mugs and a comparative advantage in the production of mugs.
C) ​the production of neither good and a comparative advantage in the production of vases.
D) ​the production of both goods and a comparative advantage in the production of mugs.

E) A) and B)
F) None of the above

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Question 82

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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. England has an absolute advantage in the production of

A) cheese and Spain has an absolute advantage in the production of bread.
B) bread and Spain has an absolute advantage in the production of cheese.
C) both goods and Spain has an absolute advantage in the production of neither good.
D) neither good and Spain has an absolute advantage in the production of both goods.

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

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Question 83

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Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 30 workers in each country. No trade occurs between the two countries. Boatland produces and consumes 75 units of wheat and 375 units of fish per year while Farmland produces and consumes 375 units of wheat and 75 units of fish per year. If trade were to occur, Boatland would trade 90 units of fish to Farmland in exchange for 80 units of wheat. If Boatland now completely specializes in fish production, how many units of fish could it now consume along with the 80 units of imported wheat?

Table 3-13 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 3-13. Which of the following points would be on Juanita's production possibilities frontier, based on a 40-hour week?

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. ​ -Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of this decision?

Figure 3-8 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

Mark can produce 24 footballs or 48 basketballs in 8 hours. Maria can produce 64 basketballs in 8 hours. In order for Maria to have a comparative advantage producing basketballs, the number of footballs she can produce in 8 hours has to be less than _____.

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. Maya should specialize in the production of

Table 3-36 -Refer to Table 3-36. Antigua has a comparative advantage in the production of

Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 10 workers in each country. Political pressure from the fish lobby in Farmland and from the wheat lobby in Boatland has prevented trade between the two countries on the grounds that cheap imports would kill the fish industry in Farmland and the wheat industry in Boatland. As a result, Boatland produces and consumes 25 units of wheat and 125 units of fish per year while Farmland produces and consumes 125 units of wheat and 25 units of fish per year. If the political pressure were overcome and trade were to occur, each country would completely specialize in the product in which it has a comparative advantage. If trade were to occur, the combined output of the two countries would increase by

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

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?

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?

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce both spend all of their time producing jackets, then total production is

Specialization and trade are closely linked to

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

Trade can make everybody better off because it

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by

The principle of comparative advantage does not provide answers to certain questions. One of those questions is