Question 1

Table 3-18
Chris and Tony's Production Opportunities
 
-Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.Which of the following prices would result in a mutually advantageous trade between Chris and Tony?

Accepted Answer

A)   1 lb.of tomatoes for 23 jars of sauce
B)   1 lb.of tomatoes for 27 jars of sauce
C)   1 lb.of tomatoes for 33 jars of sauce
D)   .Both a and b are correct.E) C) and D)
F) None of the above

Question 2

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

Accepted Answer

A)   Shawn has a comparative advantage in the production of donuts.
B)   Sue has a comparative advantage in the production of donuts.
C)   Shawn should not produce donuts.
D)   Shawn is capable of producing more donuts than Sue in a given amount of time.E) All of the above
F) A) and D)

Question 3

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
   
-Refer to Figure 3-10.What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

Accepted Answer

A)   Alice's opportunity cost of 1 pitcher of lemonade is 1/2 of a pizza and Betty's opportunity cost of 1 pitcher of lemonade is 2/3 of a pizza.
B)   Alice's opportunity cost of 1 pitcher of lemonade is 2 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 1.5 pizzas.
C)   Alice's opportunity cost of 1 pitcher of lemonade is 10 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 10 pizzas.
D)   Alice's opportunity cost of 1 pitcher of lemonade is 200 pizzas and Betty's opportunity cost of 1 pitcher of lemonade is 300 pizzas.E) None of the above
F) A) and B)

Question 4

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 meat for the farmer is

Accepted Answer

A)   1/4 pound of potatoes.
B)   1/4 hour of labor.
C)   4 pounds of potatoes.
D)   8 hours of labor.E) B) and C)
F) A) and D) C

Question 5

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

Accepted Answer

A) True 
 B)False  True

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.Zimbabwe 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) C) and D)
F) B) and C)

Question 7

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

Accepted Answer

A)   output per hour
B)   opportunity cost
C)   efficiency
D)   bargaining strength in international tradeE) A) and C)
F) None of the above

Question 8

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

Accepted Answer

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

Question 9

Table 3-12
 
-Refer to Table 3-1.Relative to the farmer,the rancher has an absolute advantage in the production of

Accepted Answer

A)   meat,but not in the production of potatoes.
B)   potatoes,but not in the production of meat.
C)   both meat and potatoes.
D)   neither meat nor potatoes.E) B) and C)
F) A) and D)

Question 10

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.Assume that England and Spain each has 40 labor hours available.If each country divides its time equally between the production of cheese and bread,then total production is

Accepted Answer

A)   20 units of cheese and 5 units of bread.
B)   25 units of cheese and 7.5 units of bread.
C)   40 units of cheese and 10 units of bread.
D)   50 units of cheese and 15 units of bread.E) B) and C)
F) A) and C)

Question 11

Assume for the United States that the opportunity cost of each airplane is 100 cars.Which of these pairs of points could be on the United States' production possibilities frontier?

Accepted Answer

A)   (200 airplanes,5,000 cars) and (150 airplanes,4,000 cars) 
B)   (200 airplanes,10,000 cars) and (150 airplanes,20,000 cars) 
C)   (300 airplanes,15,000 cars) and (200 airplanes,25,000 cars) 
D)   (300 airplanes,25,000 cars) and (200 airplanes,40,000 cars) E) A) and B)
F) A) and C)

Question 12

Table 3-12
 
-Refer to Table 3-1.Relative to the rancher,the farmer has a comparative advantage in the production of

Accepted Answer

A)   meat,but not in the production of potatoes.
B)   potatoes,but not in the production of meat.
C)   both meat and potatoes.
D)   neither meat nor potatoes.E) A) and B)
F) A) and C)

Question 13

Figure 3-3
   
-Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

Accepted Answer

A)   400 tacos and 350 burritos
B)   500 tacos and 250 burritos
C)   600 tacos and 150 burritos
D)   700 tacos and 100 burritosE) B) and C)
F) A) and D)

Question 14

Table 3-9
Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies.
 
-Refer to Table 3-9.Barb's opportunity cost of setting up one computer is testing

Accepted Answer

A)   4/5 computer and Jim's opportunity cost of setting up one computer is testing 3/4 computer.
B)   4/5 computer and Jim's opportunity cost of setting up one computer is testing 4/3 computers.
C)   5/4 computers and Jim's opportunity cost of setting up one computer is testing 3/4 computer.
D)   5/4 computers and Jim's opportunity cost of setting up one computer is testing 4/3 computers.E) B) and C)
F) A) and D)

Question 15

Figure 3-7
   
-Refer to Figure 3-7.Suppose Juba is willing to trade one bowl to Bintu for every two cups that Bintu makes and sends to Juba.Which of the following combinations of bowls and cups could Bintu then consume,assuming Bintu specializes in making cups and Juba specializes in making bowls?

Accepted Answer

A)   1 bowl and 7 cups
B)   2 bowls and 4 cups
C)   3 bowls and 3 cups
D)   4 bowls and 1 cupE) A) and B)
F) A) and C)

Question 16

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 farmer has a comparative advantage in the production of

Accepted Answer

A)   meat.
B)   potatoes.
C)   both goods.
D)   neither good.E) A) and B)
F) B) and D)

Question 17

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.In the nation of Cropitia,the opportunity cost of a pound of cheese is 1.5 pounds of ham.Based on this information,if Bonovia and Cropitia want to trade,Cropitia should specialize,in the production of

Accepted Answer

A)   ham and import cheese.
B)   cheese and import ham.
C)   both goods and import neither good.
D)   neither good and import both goods..E) A) and B)
F) A) and C)

Question 18

For a self-sufficient producer,the production possibilities frontier

Accepted Answer

A)   is the same as the consumption possibilities frontier.
B)   is greater than the consumption possibilities frontier.
C)   is less than the consumption possibilities frontier.
D)   is always a straight line.E) A) and C)
F) A) and B) A

Question 19

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 Min is

Accepted Answer

A)   1/3 parasol.
B)   1/2 parasol.
C)   2 parasols.
D)   3 parasols.E) None of the above
F) A) and C)

Question 20

Table 3-18
Chris and Tony's Production Opportunities
 
-Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.Given this information,Chris's opportunity cost of 1 lb.of tomatoes is

Accepted Answer

A)   2 jars of sauce and Tony's opportunity cost of 1 lb.of tomatoes is 3 jars of sauce.
B)   3 jars of sauce and Tony's opportunity cost of 1 lb.of tomatoes is 2 jars of sauce.
C)   20 jars of sauce and Tony's opportunity cost of 1 lb.of tomatoes is 30 jars of sauce.
D)   30 jars of sauce and Tony's opportunity cost of 1 lb.of tomatoes is 20 jars of sauce.E) B) and C)
F) A) and C)

Exam 3: Interdependence and the Gains From Trade

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

Correct Answer
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Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. -Refer to Figure 3-10.What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

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.The opportunity cost of 1 pound of meat for the farmer is

Correct Answer
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C

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

Correct Answer
verified
True

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.Zimbabwe has an absolute advantage in the production of

Correct Answer
verified

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

Correct Answer
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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

Correct Answer
verified

Table 3-12 -Refer to Table 3-1.Relative to the farmer,the rancher has an absolute advantage in the production of

Correct Answer
verified

Correct Answer
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Assume for the United States that the opportunity cost of each airplane is 100 cars.Which of these pairs of points could be on the United States' production possibilities frontier?

Correct Answer
verified

Table 3-12 -Refer to Table 3-1.Relative to the rancher,the farmer has a comparative advantage in the production of

Correct Answer
verified

Figure 3-3 -Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

Correct Answer
verified

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Barb's opportunity cost of setting up one computer is testing

Correct Answer
verified

Figure 3-7 -Refer to Figure 3-7.Suppose Juba is willing to trade one bowl to Bintu for every two cups that Bintu makes and sends to Juba.Which of the following combinations of bowls and cups could Bintu then consume,assuming Bintu specializes in making cups and Juba specializes in making bowls?

Correct Answer
verified

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 farmer has a comparative advantage in the production of

Correct Answer
verified

Correct Answer
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For a self-sufficient producer,the production possibilities frontier

Correct Answer
verified
A

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 Min is

Correct Answer
verified

Table 3-18 Chris and Tony's Production Opportunities -Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.Given this information,Chris's opportunity cost of 1 lb.of tomatoes is

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. -Refer to Figure 3-10.What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

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.The opportunity cost of 1 pound of meat for the farmer is

Correct AnswerverifiedC

It takes Anne 3 hours to make a pie and 4 hours to make a shirt.It takes Mary 2 hours to make a pie and 5 hours to make a shirt.Anne should specialize in making shirts and Mary should specialize in making pies,and they should trade.

Correct AnswerverifiedTrue

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.Zimbabwe has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 3-12 -Refer to Table 3-1.Relative to the farmer,the rancher has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume for the United States that the opportunity cost of each airplane is 100 cars.Which of these pairs of points could be on the United States' production possibilities frontier?

Correct AnswerverifiedShow Answer

Table 3-12 -Refer to Table 3-1.Relative to the rancher,the farmer has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-3 -Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

Correct AnswerverifiedShow Answer

Table 3-9 Barb and Jim run a business that sets up and tests computers.Assume that Barb and Jim can switch between setting up and testing computers at a constant rate.The following table applies. -Refer to Table 3-9.Barb's opportunity cost of setting up one computer is testing

Correct AnswerverifiedShow Answer

Figure 3-7 -Refer to Figure 3-7.Suppose Juba is willing to trade one bowl to Bintu for every two cups that Bintu makes and sends to Juba.Which of the following combinations of bowls and cups could Bintu then consume,assuming Bintu specializes in making cups and Juba specializes in making bowls?

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.The farmer has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a self-sufficient producer,the production possibilities frontier

Correct AnswerverifiedA

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 Min is

Correct AnswerverifiedShow Answer

Table 3-18 Chris and Tony's Production Opportunities -Refer to Table 3-18 Chris and Tony both produce tomatoes and pasta sauce.The table shows their possible production per month if both work the same number of 8 hour days.Given this information,Chris's opportunity cost of 1 lb.of tomatoes is

Correct AnswerverifiedShow Answer

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C

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True

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A

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