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Exam 3: Interdependence and the Gains From Trade

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Question 111

Multiple Choice

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Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring cheese along the horizontal axis, then

A) the slope of England's production possibilities frontier would be ­0.67 and the slope of Spain's production possibilities frontier would be -0.5.
B) the slope of England's production possibilities frontier would be ­1.5 and the slope of Spain's production possibilities frontier would be -2.
C) the slope of England's production possibilities frontier would be ­.75 and the slope of Spain's production possibilities frontier would be -1.
D) the slope of England's production possibilities frontier would be ­2 and the slope of Spain's production possibilities frontier would be -.5.

E) None of the above
F) All of the above

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Question 112

Multiple Choice

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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. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia not produce in 240 hours?

A) 250 pounds of ham and 120 pounds of cheese
B) 200 pounds of ham and 160 pounds of cheese
C) 160 pounds of ham and 200 pounds of cheese
D) 100 pounds of ham and 240 pounds of cheese

E) C) and D)
F) A) and D)

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Question 113

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Table 3-9 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-9. Which of the following combinations of mixers and toasters could Miguel not produce in 80 hours?

Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has an absolute advantage in the production of

Suppose that Venezuela produces beef and oil and it can switch production between each at a constant rate. If the most beef it can produce is 300 million pounds and the most oil it can produce is 50 million barrels, then what is the opportunity cost of a pound of beef and what is the opportunity cost of a barrel of oil?

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

The production possibilities frontier shows the trade-offs that the producer faces but does not identify the choice the producer will make.

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

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

Henry can make a bird house in 3 hours and he can make a bird feeder in 1 hour. The opportunity cost to Henry of making a bird house is 1/3 bird feeder.

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Table 3-41 -Refer to Table 3-41. What is Russia's opportunity cost of one radio?

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

The production possibilities frontier illustrates

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Zimbabwe's opportunity cost of one hairbrush is

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 rancher has an absolute advantage in the production of

Table 3-21 Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. -Refer to Table 3-21. Jamaica has a comparative advantage in the production of

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