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Exam 3: Interdependence and the Gains From Trade

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Question 111

Multiple Choice

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Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the farmer is

A) 1/5 pound of meat.
B) 2 hours of labor.
C) 5 pounds of meat.
D) 5 hours of labor.

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

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Question 112

Multiple Choice

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

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Question 113

Multiple Choice

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A farmer has the ability to grow either corn or cotton or some combination of the two.Given no other information,it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.Enid has an absolute advantage in the production of

It takes Ross 6 hours to produce a bushel of corn and 2 hours to wash and polish a car.It takes Courtney 6 hours to produce a bushel of corn and 1 hour to wash and polish a car.Courtney and Ross cannot gain from specialization and trade,since it takes each of them 6 hours to produce 1 bushel of corn.

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.Daisy has an absolute advantage in the production of

Table 3-8 Assume that Kito and Penda can switch between producing baskets and producing birdhouses at a constant rate. -Refer to Table 3-8.The opportunity cost of 1 birdhouse for Penda is

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for one month of production,then which of the following combinations of emeralds and rubies could Peru produce in a given month?

The opportunity cost of an item is

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?

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.Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Suppose Perry is willing to trade 4 poems to Jordan for each novel that Jordan writes and sends to Perry.Which of the following combinations of novels and poems could Jordan then consume,assuming Jordan specializes in novel production and Perry specializes in poem production?

If Shawn can produce donuts at a lower opportunity cost than Sue,then

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.The opportunity cost of 1 cup for Bintu is

Comparative advantage is related most closely to which of the following?

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.The opportunity cost of 1 bowl for Bintu is

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.Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Perry has an absolute advantage in the production of

Figure 3-5 Puneet's Production Possibilities Frontier Chirag's Production Possibilities Frontier -Refer to Figure 3-5.Puneet's opportunity cost of one purse is

Table 3-8 Assume that Kito and Penda can switch between producing baskets and producing birdhouses at a constant rate. -Refer to Table 3-8.Kito has an absolute advantage in the production of