Question 1

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. Andia should specialize in the production of

Accepted Answer

A)   wheat and Zardia should specialize in the production of beef.
B)   beef and Zardia should specialize in the production of wheat.
C)   both goods and Zardia should specialize in the production of neither good.
D)   neither good and Zardia should specialize in the production of both goods.E) A) and D)
F) A) and C)

Question 2

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. The opportunity cost of 1 unit of cheese for England is

Accepted Answer

A)   1/4 unit of bread.
B)   1 hour of labor.
C)   4 units of bread.
D)   4 hours of labor.E) A) and C)
F) All of the above

Question 3

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions per year will be

Accepted Answer

A)   100 radios, 300 televisions in Radioland and 300 radios, 100 televisions in Teeveeland.
B)   300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.
C)   200 radios, 100 televisions in Radioland and 100 radios, 200 televisions in Teeveeland.
D)   300 radios, 100 televisions in Radioland and 100 radios, 400 televisions in Teeveeland.E) None of the above
F) B) and C)

Question 4

Figure 3-9
   
-Refer to Figure 3-9. If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails, then total production is

Accepted Answer

A)   15 bolts and 40 nails.
B)   25 bolts and 70 nails.
C)   30 bolts and 80 nails.
D)   50 bolts and 140 nails.E) B) and D)
F) B) and C)

Question 5

Figure 3-6
   
-Refer to Figure 3-6. Maxine 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) A) and D)

Question 6

Table 3-18
Chris and Tony's Production Opportunities
 
-By definition, exports are

Accepted Answer

A)   limits placed on the quantity of goods brought into a country.
B)   goods in which a country has an absolute advantage.
C)   people who work in foreign countries.
D)   goods produced domestically and sold abroad.E) A) and B)
F) None of the above

Question 7

Figure 3-8
   
-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) None of the above

Question 8

For international trade to benefit a country, it must benefit all citizens of that country.

Accepted Answer

A) True 
 B)False

Question 9

Table 3-18
Chris and Tony's Production Opportunities
 
-Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts. If the US exports semiconductors to Mexico and imports auto parts from Mexico,

Accepted Answer

A)   both countries, as a whole, will be better off.
B)   all individuals in both countries will be better off.
C)   both countries, as a whole, will be worse off.
D)   all individuals in both countries will be worse off.E) All of the above
F) C) and D)

Question 10

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 pizza?

Accepted Answer

A)   Alice's opportunity cost of 1 pizza is 1/2 of a pitcher of lemonade and Betty's opportunity cost of 1 pizza is 2/3 of a pitcher of lemonade.
B)   Alice's opportunity cost of 1 pizza is 1 pitcher of lemonade and Betty's opportunity cost of 1 pizza is 3 pitchers of lemonade.
C)   Alice's opportunity cost of 1 pizza is 2 pitchers of lemonade and Betty's opportunity cost of 1 pizza is 1.5 pitchers of lemonade.
D)   Alice's opportunity cost of 1 pizza is 400 pitchers of lemonade and Betty's opportunity cost of 1 pizza is 450 pitchers of lemonade.E) C) and D)
F) B) and C)

Question 11

Opportunity cost measures the trade-off between two goods that each producer faces.

Accepted Answer

A) True 
 B)False

Question 12

Figure 3-6
   
-Refer to Figure 3-6. If Daisy must work 2.5 hours to make each pie, then her production possibilities frontier is based on how many hours of work?

Accepted Answer

A)   6 hours
B)   7.5 hours
C)   37.5 hours
D)   50 hoursE) A) and C)
F) A) and B)

Question 13

An economy's production possibilities frontier is also its consumption possibilities frontier

Accepted Answer

A)   under all circumstances.
B)   under no circumstances.
C)   when the economy is self-sufficient.
D)   when the rate of tradeoff between the two goods being produced is constant.E) B) and D)
F) A) and C)

Question 14

Trade allows a country to consume outside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 15

If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self-sufficient.

Accepted Answer

A) True 
 B)False

Question 16

People who provide you with goods and services

Accepted Answer

A)   are acting out of generosity.
B)   do so because they get something in return.
C)   have chosen not to become interdependent.
D)   are required to do so by the government.E) A) and D)
F) A) and C)

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. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

Accepted Answer

A)   0.75 pound.
B)   0.80 pound.
C)   1.00 pounds.
D)   1.25 pounds.E) A) and B)
F) B) and C)

Question 18

Table 3-18
Chris and Tony's Production Opportunities
 
-By definition, imports are

Accepted Answer

A)   people who work in foreign countries.
B)   goods in which a country has an absolute advantage.
C)   limits placed on the quantity of goods leaving a country.
D)   goods produced abroad and sold domestically.E) A) and D)
F) C) and D)

Question 19

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) None of the above
F) B) and D)

Question 20

International trade can make some individuals within a country worse off, even as it makes the country as a whole better off.

Accepted Answer

A) True 
 B)False

Exam 3: Interdependence and the Gains From Trade

Correct Answer
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Figure 3-6 -Refer to Figure 3-6. Maxine has an absolute advantage in the production of

Correct Answer
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If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self-sufficient.

Correct Answer
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Table 3-18 Chris and Tony's Production Opportunities -By definition, exports are

Correct Answer
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Trade allows a country to consume outside its production possibilities frontier.

Correct Answer
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Figure 3-6 -Refer to Figure 3-6. If Daisy must work 2.5 hours to make each pie, then her production possibilities frontier is based on how many hours of work?

Correct Answer
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International trade can make some individuals within a country worse off, even as it makes the country as a whole better off.

Correct Answer
verified

People who provide you with goods and services

Correct Answer
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Opportunity cost measures the trade-off between two goods that each producer faces.

Correct Answer
verified

Table 3-18 Chris and Tony's Production Opportunities -By definition, imports are

Correct Answer
verified

An economy's production possibilities frontier is also its consumption possibilities frontier

Correct Answer
verified

For international trade to benefit a country, it must benefit all citizens of that country.

Correct Answer
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Figure 3-9 -Refer to Figure 3-9. If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails, then total production is

Correct Answer
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Figure 3-8 -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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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. The opportunity cost of 1 unit of cheese for England is

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. Andia should specialize 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. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

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 pizza?

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

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Figure 3-6 -Refer to Figure 3-6. Maxine has an absolute advantage in the production of

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If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self-sufficient.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-18 Chris and Tony's Production Opportunities -By definition, exports are

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Trade allows a country to consume outside its production possibilities frontier.

Correct AnswerverifiedShow Answer

Figure 3-6 -Refer to Figure 3-6. If Daisy must work 2.5 hours to make each pie, then her production possibilities frontier is based on how many hours of work?

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International trade can make some individuals within a country worse off, even as it makes the country as a whole better off.

Correct AnswerverifiedShow Answer

People who provide you with goods and services

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Opportunity cost measures the trade-off between two goods that each producer faces.

Correct AnswerverifiedShow Answer

Table 3-18 Chris and Tony's Production Opportunities -By definition, imports are

Correct AnswerverifiedShow Answer

An economy's production possibilities frontier is also its consumption possibilities frontier

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For international trade to benefit a country, it must benefit all citizens of that country.

Correct AnswerverifiedShow Answer

Figure 3-9 -Refer to Figure 3-9. If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails, then total production is

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

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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. The opportunity cost of 1 unit of cheese for England is

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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. Andia should specialize in the production of

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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. Whenever Bonovia increases its production of ham by 1 pound per month, then it must decrease its production of cheese by

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 pizza?

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