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Exam 3: Interdependence and the Gains From Trade

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Question 51

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Use the following Table to answer the question : Table 3-35 -Refer to Table 3-35. Finland's opportunity cost of producing 1 unit of ham is

A) 3/2 dozen eggs. This is higher than Denmark's opportunity cost.
B) 3/2 dozen eggs. This is lower than Denmark's opportunity cost.
C) 2/3 dozen eggs. This is higher than Denmark's opportunity cost.
D) 2/3 dozen eggs. This is lower than Denmark's opportunity cost.

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

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Question 52

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Suppose that the country of Xenophobia chose to isolate itself from the rest of the world. Its ruler proclaimed that Xenophobia should become self-sufficient, so it would not engage in foreign trade. From an economic perspective, this idea would

A) make sense if Xenophobia had an absolute advantage in all goods.
B) make sense if Xenophobia had no absolute advantages in any good.
C) not make sense as long as Xenophobia had a comparative advantage in some good.
D) not make sense as long as Xenophobia had an absolute advantage in at least half the goods that could be traded.

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

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Question 53

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Use the following Figure to answer the question : Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. What is Kate's opportunity cost of one cookie?

Use the following Figure to answer the question : Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 novel for Jordan is

Use the following Figure to answer the question : Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. What is Mary's opportunity cost of one muffin?

Use the following Table to answer the question : Table 3-12 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. -Refer to Table 3-12. The number of minutes needed by Barb to test a computer is

Use the following Table to answer the question : 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?

Use the following scenario to answer the question : 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. Give a range of prices in terms of pounds of rice per pound of broccoli at which the two countries would be both be willing to trade.

Use the following Table to answer the question : Table 3-9 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-9. We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel. If we were to do this, measuring mixers along the horizontal axis, then

Use the following Figure to answer the question : Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. Mexico would incur an opportunity cost of 8 units of Good X if it increased its production of Good Y by

The gains from specialization and trade are based on advantage.

Use the following Figure to answer the question : 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 not produce in a given day?

Goods produced abroad and sold domestically are called

Use the following Figure to answer the question : Figure 3-3 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

Use the following Table to answer the question : Table 3-1 : Assume that John and Jane can switch between producing bread and wine at a constant rate. Assume that John and Jane each work 24 hours. What happens to total production if instead of each person spending 12 hours producing each good, Jane spends 21 hours producing wine and 3 hours producing bread and John spends 3 hours producing wine and 21 hours producing bread?

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.

Use the following Table to answer the question : 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. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is

Use the following Table to answer the question : Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Assume that Zimbabwe and Portugal each has 60 machine minutes available. Originally, each country divided its time equally between the production of toothbrushes and hairbrushes. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output increased by

Use the following Figure to answer the question : Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Merve should specialize in the production of

Use the following Figure to answer the question : Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. If the production possibilities frontier shown is for 24 hours of production, then how long does it take Brazil to make one peanut?