Question 1

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

Accepted Answer

A)   4 bushels of wheat and 7.5 yards of cloth.
B)   7 bushels of wheat and 13.5 yards of cloth.
C)   8 bushels of wheat and 15 yards of cloth.
D)   14 bushels of wheat and 27 yards of cloth.E) B) and C)
F) B) and D)

Question 2

An economy can produce at any point on or inside its production possibilities frontier,but it cannot produce at points outside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 3

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.The opportunity cost of 1 plate for Huang is

Accepted Answer

A)   1/3 parasol.
B)   1/2 parasol.
C)   3 parasols.
D)   4 parasols.E) All of the above
F) B) and C)

Question 4

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-3.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?

Accepted Answer

A)   0.3 hairbrush
B)   3 hairbrushes
C)   30 hairbrushes
D)   100 hairbrushesE) A) and B)
F) A) and C)

Question 5

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea.If we were to do this,measuring airplanes along the horizontal axis,then

Accepted Answer

A)   the slope of Japan's production possibilities frontier would be -5 and the slope of Korea's production possibilities frontier would be -3.
B)   the slope of Japan's production possibilities frontier would be -0.2 and the slope of Korea's production possibilities frontier would be -0.33.
C)   the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
D)   the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.E) None of the above
F) A) and B)

Question 6

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

Question 7

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

Accepted Answer

A)   parasols and a comparative advantage in the production of parasols.
B)   parasols and a comparative advantage in the production of plates.
C)   neither good and a comparative advantage in the production of parasols.
D)   neither good and a comparative advantage in the production of plates.E) B) and C)
F) A) and D)

Question 8

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

Accepted Answer

A)   Belarus should export linen to Russia.
B)   Russia should export linen to Belarus.
C)   trading linen would provide no net advantage to either country.
D)   Without additional information about opportunity costs,this question cannot be answered.E) A) and D)
F) C) and D)

Question 9

Figure 3-3
   
-Refer to Figure 3-3.Arturo has an absolute advantage in the production of

Accepted Answer

A)   burritos and a comparative advantage in the production of tacos.
B)   burritos and a comparative advantage in the production of burritos.
C)   neither good and a comparative advantage in the production of tacos.
D)   neither good and a comparative advantage in the production of burritos.E) None of the above
F) A) and C)

Question 10

Figure 3-9
   
-Refer to Figure 3-9.Without trade,Uzbekistan produced and consumed 12 bolts and 36 nails and Azerbaijan produced and consumed 14 bolts and 24 nails.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 16 bolts for 38 nails.As a result,Uzbekistan gained

Accepted Answer

A)   2 bolts and 2 nails and Azerbaijan gained 2 bolts and 18 nails.
B)   4 bolts and 2 nails and Azerbaijan gained 2 bolts and 14 nails.
C)   14 bolts and 38 nails and Azerbaijan gained 16 bolts and 42 nails.
D)   16 bolts and 38 nails and Azerbaijan gained 16 bolts and 38 nails.E) C) and D)
F) B) and C)

Question 11

As long as two people have different opportunity costs,each can gain from trade with the other,since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Accepted Answer

A) True 
 B)False

Question 12

When there are two people and each is capable of producing two goods,it is possible for one person to have a comparative advantage over the other in both goods.

Accepted Answer

A) True 
 B)False

Question 13

Trade can make everybody better off because it

Accepted Answer

A)   increases cooperation among nations.
B)   allows people to specialize according to comparative advantage.
C)   requires some workers in an economy to be retrained.
D)   reduces competition among domestic companies.E) A) and C)
F) A) and D)

Question 14

Figure 3-6
   
-Refer to Figure 3-6.Daisy has an absolute advantage in the production of

Accepted Answer

A)   both goods and a comparative advantage in the production of pies.
B)   both goods and a comparative advantage in the production of tarts.
C)   neither good and a comparative advantage in the production of pies.
D)   neither good and a comparative advantage in the production of tarts.E) B) and D)
F) All of the above

Question 15

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.Varick has an absolute advantage in the production of

Accepted Answer

A)   wheat.
B)   cloth.
C)   both goods.
D)   neither good.E) A) and B)
F) B) and D)

Question 16

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin.Fred and Barney both gain from the exchange.We can conclude that,for Barney,the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.

Accepted Answer

A) True 
 B)False

Question 17

Economists generally support

Accepted Answer

A)   trade restrictions.
B)   government management of trade.
C)   export subsidies.
D)   free international trade.E) C) and D)
F) B) and D)

Question 18

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

Accepted Answer

A)   5 wallets for 1.25 purses
B)   5 wallets for 2.5 purses
C)   5 wallets for 3.75 purses
D)   Hosne and Merve could not both gain from trade with each other at any price.E) None of the above
F) B) and D)

Question 19

Figure 3-9
   
-Refer to Figure 3-9.Uzbekistan should specialize in the production of

Accepted Answer

A)   bolts and import nails.
B)   nails and import bolts.
C)   both goods and import neither good.
D)   neither good and import both goods.E) All of the above
F) C) and D)

Question 20

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

Accepted Answer

A)   (120 cellular phones programmed,250 cellular phones tested) 
B)   (180 cellular phones programmed,150 cellular phones tested) 
C)   (240 cellular phones programmed,600 cellular phones tested) 
D)   More than one of the above would be on Shantala's production possibilities frontier.E) A) and D)
F) All of the above

Exam 3: Interdependence and the Gains From Trade

An economy can produce at any point on or inside its production possibilities frontier,but it cannot produce at points outside its production possibilities frontier.

Correct Answer
verified

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
verified

Correct Answer
verified

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.The opportunity cost of 1 plate for Huang is

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?

Correct Answer
verified

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.Varick has an absolute advantage in the production of

Correct Answer
verified

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin.Fred and Barney both gain from the exchange.We can conclude that,for Barney,the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.

Correct Answer
verified

Economists generally support

Correct Answer
verified

Figure 3-9 -Refer to Figure 3-9.Uzbekistan should specialize in the production of

Correct Answer
verified

Correct Answer
verified

Figure 3-6 -Refer to Figure 3-6.Daisy has an absolute advantage in the production of

Correct Answer
verified

When there are two people and each is capable of producing two goods,it is possible for one person to have a comparative advantage over the other in both goods.

Correct Answer
verified

Correct Answer
verified

Figure 3-3 -Refer to Figure 3-3.Arturo has an absolute advantage in the production of

Correct Answer
verified

Trade can make everybody better off because it

Correct Answer
verified

As long as two people have different opportunity costs,each can gain from trade with the other,since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Correct Answer
verified

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

An economy can produce at any point on or inside its production possibilities frontier,but it cannot produce at points outside its production possibilities frontier.

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

Correct AnswerverifiedShow Answer

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.The opportunity cost of 1 plate for Huang is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Suppose Zimbabwe decides to increase its production of toothbrushes by 10.What is the opportunity cost of this decision?

Correct AnswerverifiedShow Answer

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.Varick has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin.Fred and Barney both gain from the exchange.We can conclude that,for Barney,the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.

Correct AnswerverifiedShow Answer

Economists generally support

Correct AnswerverifiedShow Answer

Figure 3-9 -Refer to Figure 3-9.Uzbekistan should specialize in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-6 -Refer to Figure 3-6.Daisy has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

When there are two people and each is capable of producing two goods,it is possible for one person to have a comparative advantage over the other in both goods.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-3 -Refer to Figure 3-3.Arturo has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Trade can make everybody better off because it

Correct AnswerverifiedShow Answer

As long as two people have different opportunity costs,each can gain from trade with the other,since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Correct AnswerverifiedShow Answer

Belarus has a comparative advantage in the production of linen,but Russia has an absolute advantage in the production of linen.If these two countries decide to trade,

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified