Question 1

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.
 
-Refer to Table 3-2.Aruba and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

Accepted Answer

A)   0 coolers.
B)   0.25 coolers.
C)   2.5 coolers.
D)   Aruba and Iceland can always gain from trade regardless of their opportunity costs.E) C) and D)
F) A) and B)

Question 2

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

Accepted Answer

A)   is equal to 0.
B)   is between 0 and 1.
C)   is equal to 1.
D)   is greater than 1.E) C) and D)
F) All of the above

Question 3

Figure 3-8
 Chile’s Production Possibilities Frontier
 
Colombia’s Production Possibilities Frontier
-Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Accepted Answer

A)   12 pounds of coffee and 12 pounds of soybeans.
B)   14 pounds of coffee and 9 pounds of soybeans.
C)   16 pounds of coffee and 6 pounds of soybeans.
D)   28 pounds of coffee and 18 pounds of soybeans.E) All of the above
F) B) and C)

Question 4

Scenario 3-1.Ice cream and cake.
The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time.

-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 5

Ellie and Brendan both produce apple pies and vanilla ice cream.If Ellie's opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan's opportunity cost of one apple pie is 1/4 gallon of ice cream,a mutually advantageous trade can be struck at a price of one apple pie for 1/3 gallon of ice cream.

Accepted Answer

A) True 
 B)False

Question 6

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.Portugal has an absolute advantage in the production of

Accepted Answer

A)   toothbrushes and a comparative advantage in the production of toothbrushes.
B)   toothbrushes and a comparative advantage in the production of hairbrushes.
C)   hairbrushes and a comparative advantage in the production of toothbrushes.
D)   hairbrushes and a comparative advantage in the production of hairbrushes.E) B) and C)
F) A) and D)

Question 7

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) None of the above
F) A) and C)

Question 8

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.England has an absolute advantage in the production of

Accepted Answer

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

Question 9

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.
 
-Refer to Table 3-2.Aruba has an absolute advantage in the production of

Accepted Answer

A)   coolers and Iceland has an absolute advantage in the production of radios.
B)   radios and Iceland has an absolute advantage in the production of coolers.
C)   both goods and Iceland has an absolute advantage in the production of neither good.
D)   neither good and Iceland has an absolute advantage in the production of both goods.E) A) and B)
F) A) and C)

Question 10

Table 3-1
Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-1.Assume that Andia and Zardia each has 60 minutes available.If each person spends all his time producing the good in which he has a comparative advantage,then total production is

Accepted Answer

A)   3 bushels of wheat and 6 pounds of beef.
B)   3.5 bushels of wheat and 5.5 pounds of beef.
C)   4 bushels of wheat and 5 pounds of beef.
D)   7 bushels of wheat and 11 pounds of beef.E) B) and D)
F) A) and C)

Question 11

Figure 3-9
Uzbekistan’s Production Possibilities Frontier 
Azerbaijan’s Production Possibilities Frontier

-Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

Accepted Answer

A)   1/4 bolt and Uzbekistan's opportunity cost of one nail is 1/2 bolt.
B)   1/4 bolt and Uzbekistan's opportunity cost of one nail is 2 bolts.
C)   4 bolts and Uzbekistan's opportunity cost of one nail is 1/2 bolt.
D)   4 bolts and Uzbekistan's opportunity cost of one nail is 2 bolts.E) A) and C)
F) C) and D)

Question 12

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-11.For Bonovia,what is the opportunity cost of a pound of cheese?

Accepted Answer

A)   0.8 pounds of ham
B)   1.25 pounds of ham
C)   8 pounds of ham
D)   16 pounds of hamE) All of the above
F) C) and D)

Question 13

Charlotte can produce pork and beans and can switch between producing them at a constant rate.If it takes her 10 hours to produce a pound of pork and 5 hours to produce a pound of beans,what is her opportunity cost of pork and what is her opportunity cost of beans?

Accepted Answer

The opportunity cost of pork i...

Question 14

Figure 3-3
Arturo’s Production Possibilities FrontierFrontier 
Dina’s Production Possibilities 
-Refer to Figure 3-3.Which of the following is not correct?

Accepted Answer

A)   Arturo and Dina could each consume 100 tacos and 100 burritos without trade.
B)   Neither Arturo nor Dina could each consume 200 tacos and 200 burritos without trade.
C)   Arturo and Dina could each consume 200 tacos and 200 burritos with trade.
D)   Total consumption of burritos could not be 600 either with or without trade.E) B) and C)
F) All of the above

Question 15

Figure 3-4
 Perry’s Production Possibilities Frontier
 Jordan’s Production Possibilities Frontier
-Refer to Figure 3-4.Which of the following is not correct?

Accepted Answer

A)   Perry and Jordan could each consume 2 novels and 6 poems without trade.
B)   Jordan could consume 2 novels and 6 poems both with and without trade.
C)   Perry and Jordan could each consume 2 novels and 6 poems with trade.
D)   Perry and Jordan could each consume 12 poems without trade.E) B) and D)
F) A) and B)

Question 16

Figure 3-2
The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time.

-Refer to figure 3-2.Bob has

Accepted Answer

A)   an absolute and comparative advantage producing good x.
B)   an absolute but not a comparative advantage producing good x.
C)   a comparative but not an absolute advantage producing good x.
D)   neither a comparative nor an absolute advantage producing good x.E) B) and C)
F) A) and B)

Question 17

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

Accepted Answer

A)   Is it possible for specialization and trade to benefit more than one party to a trade?
B)   Is it possible for specialization and trade to increase total output of traded goods?
C)   Do opportunity costs play a role in people's decisions to specialize in certain activities?
D)   What determines the price at which trade takes place?E) All of the above
F) C) and D)

Question 18

Table 3-1
Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate.
 
-Refer to Table 3-1.At which of the following prices would both Andia and Zardia gain from trade with each other?

Accepted Answer

A)   6 bushels of wheat for 10.5 pounds of beef
B)   12 bushels of wheat for 19 pounds of beef
C)   24 bushels of wheat for 34 pounds of beef
D)   Andia and Zardia could not both gain from trade with each other at any price.E) B) and C)
F) A) and D)

Question 19

Table 3-6
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
 
-Refer to Table 3-6.Miguel has an absolute advantage in the production of

Accepted Answer

A)   both goods and a comparative advantage in the production of mixers.
B)   both goods and a comparative advantage in the production of toasters.
C)   neither good and a comparative advantage in the production of mixers.
D)   neither good and a comparative advantage in the production of toasters.E) B) and D)
F) B) and C)

Question 20

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.Which of the following combinations of meat and potatoes could the rancher not produce in 24 hours?

Accepted Answer

A)   2 pounds of meat and 3 pounds of potatoes.
B)   4 pounds of meat and 2 pounds of potatoes.
C)   6 pounds of meat and 1 pounds of potatoes.
D)   8 pounds of meat and 0.5 pound of potatoes.E) B) and C)
F) A) and B)

Exam 3: Interdependence and the Gains From Trade

Charlotte can produce pork and beans and can switch between producing them at a constant rate.If it takes her 10 hours to produce a pound of pork and 5 hours to produce a pound of beans,what is her opportunity cost of pork and what is her opportunity cost of beans?

Correct Answer
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The opportunity cost of pork i...
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Figure 3-2 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. -Refer to figure 3-2.Bob has

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

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

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

Correct Answer
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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.Which of the following combinations of meat and potatoes could the rancher not produce in 24 hours?

Correct Answer
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Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.Miguel has an absolute advantage in the production of

Correct Answer
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Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba has an absolute advantage in the production of

Correct Answer
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Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

Correct Answer
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Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Correct Answer
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Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.England has an absolute advantage in the production of

Correct Answer
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Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.For Bonovia,what is the opportunity cost of a pound of cheese?

Correct Answer
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Figure 3-3 Arturo’s Production Possibilities FrontierFrontier Dina’s Production Possibilities -Refer to Figure 3-3.Which of the following is not correct?

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

Correct Answer
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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

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.Portugal has an absolute advantage in the production of

Correct Answer
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Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Which of the following is not correct?

Correct Answer
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Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.At which of the following prices would both Andia and Zardia gain from trade with each other?

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

Charlotte can produce pork and beans and can switch between producing them at a constant rate.If it takes her 10 hours to produce a pound of pork and 5 hours to produce a pound of beans,what is her opportunity cost of pork and what is her opportunity cost of beans?

Correct AnswerverifiedThe opportunity cost of pork i...View AnswerShow Answer

Figure 3-2 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. -Refer to figure 3-2.Bob has

Correct AnswerverifiedShow Answer

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

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

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba and Iceland would not be able to gain from trade if Iceland's opportunity cost of one radio changed to

Correct AnswerverifiedShow Answer

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.Which of the following combinations of meat and potatoes could the rancher not produce in 24 hours?

Correct AnswerverifiedShow Answer

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.Miguel has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Aruba has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier -Refer to Figure 3-9.Azerbaijan's opportunity cost of one nail is

Correct AnswerverifiedShow Answer

Figure 3-8 Chile’s Production Possibilities Frontier Colombia’s Production Possibilities Frontier -Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

Correct AnswerverifiedShow Answer

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.England has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.For Bonovia,what is the opportunity cost of a pound of cheese?

Correct AnswerverifiedShow Answer

Figure 3-3 Arturo’s Production Possibilities FrontierFrontier Dina’s Production Possibilities -Refer to Figure 3-3.Which of the following is not correct?

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

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

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.Portugal has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier -Refer to Figure 3-4.Which of the following is not correct?

Correct AnswerverifiedShow Answer

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-1.At which of the following prices would both Andia and Zardia gain from trade with each other?

Correct AnswerverifiedShow Answer

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It takes Catherine 4 hours (24...
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