Question 1

The gains from specialization and trade are based on absolute advantage.

Accepted Answer

A) True 
 B)False

Question 2

Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier  
-Refer to Figure 3-19. At which of the following prices would both Chile and Colombia gain from trade with each other?

Accepted Answer

A)  6 pounds of soybeans for 9 pounds of coffee
B)  8 pounds of soybeans for 20 pounds of coffee
C)  11 pounds of soybeans for 33 pounds of coffee
D)  Chile and Colombia could not both gain from trade with each other at any price.E) B) and D)
F) A) and D)

Question 3

Table 3-2
Assume that England and Holland can switch between producing milk and oats at a constant rate. 
-Refer to Table 3-2. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Holland. If we were to do this, measuring milk along the horizontal axis, then

Accepted Answer

A)  the slope of England's production possibilities frontier would be -10/4 and the slope of Holland's production possibilities frontier would be -4/3.
B)  the slope of England's production possibilities frontier would be -4/10 and the slope of Holland's production possibilities frontier would be -3/4.
C)  the slope of England's production possibilities frontier would be 10/4 and the slope of Holland's production possibilities frontier would be 4/3.
D)  the slope of England's production possibilities frontier would be 4/10 and the slope of Holland's production possibilities frontier would be 3/4.E) All of the above
F) A) and C)

Question 4

Table 3-36 
-Refer to Table 3-36. What is Antigua's opportunity cost of one umbrella?

Accepted Answer

A)  3/5 towels
B)  2/3 towels
C)  3/2 towels
D)  5/3 towelsE) A) and C)
F) A) and B)

Question 5

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier  
-Refer to Figure 3-4. If the production possibilities frontier shown for Lisa is for 4 months of work, then how long does it take Lisa to produce one jacket?

Accepted Answer

A)  1/4 month
B)  1/2 month
C)  2 months
D)  4 monthsE) C) and D)
F) All of the above

Question 6

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

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) A) and B)
F) A) and C)

Question 7

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

Accepted Answer

A) True 
 B)False

Question 8

Table 3-20
Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. 
-Refer to Table 3-20. What is Theresa's opportunity cost of producing one bushel of wheat?

Accepted Answer

A)  5/6 pound of beef
B)  6/5 pound of beef
C)  3/5 pound of beef
D)  5/3 pounds of beefE) B) and D)
F) B) and C)

Question 9

Table 3-29
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 3-29. Juanita's opportunity cost of programming one cellular phone is testing

Accepted Answer

A)  7.5 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 5/2 cellular phones.
B)  2/15 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 5/2 cellular phones.
C)  7.5 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 2/5 cellular phones.
D)  2/15 cellular phones and Shantala's opportunity cost of programming one cellular phone is testing 2/5 cellular phones.E) A) and B)
F) A) and C)

Question 10

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. Without trade, England produced and consumed 32 units of cheese and 2 units of bread and Spain produced and consumed 6 units of cheese and 2 units of bread. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread. As a result, England gained

Accepted Answer

A)  0 units of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
B)  1 unit of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
C)  7 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.
D)  33 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.E) B) and C)
F) B) and D)

Question 11

The most obvious benefit of specialization and trade is that they allow us to

Accepted Answer

A)  work more hours per week than we otherwise would be able to work.
B)  consume more goods than we otherwise would be able to consume.
C)  spend more money on goods that are beneficial to society, and less money on goods that are harmful to society.
D)  consume more goods by forcing people in other countries to consume fewer goods.E) B) and C)
F) A) and C)

Question 12

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier  
-Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

Accepted Answer

A)  2 sweaters and 8 jackets.
B)  3 sweaters and 13 jackets.
C)  5 sweaters and 8 jackets.
D)  6 sweaters and 26 jackets.E) B) and D)
F) None of the above

Question 13

Figure 3-21
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier  
-Refer to Figure 3-21. Azerbaijan has an absolute advantage in the production of

Accepted Answer

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

Question 14

​Table 3-38 
-​Refer to Table 3-38. Iowa and Nebraska can both produce corn and soybeans, and can switch between the production of corn and soybeans at a constant rate. The table illustrates the amount of corn or soybeans each state can produce in one growing season. From the table we know that Iowa has a

Accepted Answer

A)  ​comparative advantage in the production of soybeans and Nebraska has a comparative advantage in the production of corn.
B)  ​comparative advantage in the production of corn and Nebraska has a comparative advantage in the production of soybeans.
C)  ​comparative advantage in both goods and Nebraska has a comparative advantage in neither good.
D)  ​comparative advantage in neither good and Nebraska has a comparative advantage in both goods.E) C) and D)
F) A) and B)

Question 15

Table 3-23
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate.
​ 
-Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the farmer is

Accepted Answer

A)  1/2 pound of pork.
B)  2 hours of labor.
C)  2 pounds of pork.
D)  4 hours of labor.E) None of the above
F) A) and C)

Question 16

Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier  
-Refer to Figure 3-19. Chile would incur an opportunity cost of 36 pounds of coffee if it increased its production of soybeans by

Accepted Answer

A)  12 pounds.
B)  27 pounds.
C)  30 pounds.
D)  48 pounds.E) A) and D)
F) All of the above

Question 17

Economists use the term ______ to refer to the ability to produce a good at a lower opportunity cost than another producer.

Accepted Answer

comparativ...

Question 18

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

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) A) and B)
F) B) and C)

Question 19

Table 3-27
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
​ 
-Refer to Table 3-27. The opportunity cost of 1 parasol for Huang is

Accepted Answer

A)  1/3 plate.
B)  1/2 plate.
C)  3 plates.
D)  6 plates.E) None of the above
F) B) and D)

Question 20

Figure 3-23
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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Accepted Answer

A)  Cropitia can produce more than 400 pounds of ham per month.
B)  Cropitia can produce more than 320 pounds of cheese per month.
C)  Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.
D)  Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.E) None of the above
F) C) and D)

Exam 3: Interdependence and the Gains From Trade

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

Correct Answer
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Correct Answer
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Figure 3-23 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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Correct Answer
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Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile would incur an opportunity cost of 36 pounds of coffee if it increased its production of soybeans by

Correct Answer
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Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

Correct Answer
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Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If the production possibilities frontier shown for Lisa is for 4 months of work, then how long does it take Lisa to produce one jacket?

Correct Answer
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Correct Answer
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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

Correct Answer
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Table 3-36 -Refer to Table 3-36. What is Antigua's opportunity cost of one umbrella?

Correct Answer
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Correct Answer
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Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the farmer is

Correct Answer
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Correct Answer
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The most obvious benefit of specialization and trade is that they allow us to

Correct Answer
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Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. What is Theresa's opportunity cost of producing one bushel of wheat?

Correct Answer
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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

Correct Answer
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The gains from specialization and trade are based on absolute advantage.

Correct Answer
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Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. At which of the following prices would both Chile and Colombia gain from trade with each other?

Correct Answer
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Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Azerbaijan has an absolute advantage in the production of

Correct Answer
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Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. The opportunity cost of 1 parasol for Huang is

Correct Answer
verified

Economists use the term ______ to refer to the ability to produce a good at a lower opportunity cost than another producer.

Correct Answer
verified
comparativ...
View Answer

Exam 3: Interdependence and the Gains From Trade

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-23 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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Correct AnswerverifiedShow Answer

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile would incur an opportunity cost of 36 pounds of coffee if it increased its production of soybeans by

Correct AnswerverifiedShow Answer

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

Correct AnswerverifiedShow Answer

Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If the production possibilities frontier shown for Lisa is for 4 months of work, then how long does it take Lisa to produce one jacket?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 3-36 -Refer to Table 3-36. What is Antigua's opportunity cost of one umbrella?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. ​ -Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the farmer is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The most obvious benefit of specialization and trade is that they allow us to

Correct AnswerverifiedShow Answer

Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. What is Theresa's opportunity cost of producing one bushel of wheat?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The gains from specialization and trade are based on absolute advantage.

Correct AnswerverifiedShow Answer

Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. At which of the following prices would both Chile and Colombia gain from trade with each other?

Correct AnswerverifiedShow Answer

Figure 3-21 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-21. Azerbaijan has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. ​ -Refer to Table 3-27. The opportunity cost of 1 parasol for Huang is

Correct AnswerverifiedShow Answer

Economists use the term ______ to refer to the ability to produce a good at a lower opportunity cost than another producer.

Correct Answerverifiedcomparativ...View AnswerShow Answer

Correct Answer
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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

Correct Answer
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Correct Answer
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Correct Answer
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Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the farmer is

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. The opportunity cost of 1 parasol for Huang is

Correct Answer
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Correct Answer
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comparativ...
View Answer