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Exam 3: Interdependence and the Gains From Trade

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Question 61

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

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It takes Greg 1 hour to produc...

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Question 62

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Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week. Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week. Zora has the comparative advantage in quilts and the absolute advantage in neither good, while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods.

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Question 63

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Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Which of the following is not correct?

Table 3-35 -Refer to Table 3-35. Which good(s) does Denmark have an absolute advantage producing?

Figure 3-12 Argentina's Production Possibilities Frontier Peru's Production Possibilities Frontier -​A production possibilities frontier (PPF) is characterized by increasing opportunity costs when

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. If Arturo and Dina switch from each person dividing their time equally between the production of tacos and burritos to each person spending all of their time producing the good in which they have a comparative advantage, then total production of burritos will increase by

Table 3-14 Assume that Nick and Faldo can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-14. Assume that Nick and Faldo each has 2 hours available. If each person divides his time equally between the production of wheat and cloth, then total production is

Table 3-38 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. ​ -Refer to Table 3-38. England should export

In which of the following cases should the United States produce more noodles than it wants for its own use and trade some of those noodles to Italy in exchange for wine?

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. If Hosne and Merve switch from each person dividing her time equally between the production of purses and wallets to each person spending all of her time producing the good in which she has a comparative advantage, then total production of purses will increase by

Table 3-32 US and French Production Opportunities -Refer to Table 3-32 France has an absolute advantage in the production of

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 cookie?

Figure 3-12 Argentina's Production Possibilities Frontier Peru's Production Possibilities Frontier -When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all

If one producer has the absolute advantage in the production of all goods, then that same producer will have the comparative advantage in the production of all goods as well.

Scenario 3-1 The production possibilities frontiers below show how much Greg and Catherine can each produce in 8 hours of time. Greg's Production Possibilities Catherine's Production Possibilities -Refer to Scenario 3-1. Is it possible for Greg and Catherine to gain from trade? Defend your answer.

For a self-sufficient producer, the production possibilities frontier

Figure 3-22 Alice and Betty's Production Possibilities in one 8-hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-22. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

If the U.S. could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor, would it necessarily follow that the U.S. should specialize in television production? Explain your answer using the concepts of comparative and or absolute advantage.

Figure 3-5 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-5. If the production possibilities frontier shown for Merve is for 8 hours of work, then how long does it take Merve to make one purse?