Question 1

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

Accepted Answer

A)   1/4 unit of cheese.
B)   1/4 hour of labor.
C)   4 units of cheese.
D)   4 hours of labor.E) C) and D)
F) A) and B)

Question 2

The gains from specialization and trade are based on advantage.

Accepted Answer

The answer of The gains from specialization and trade are...

Question 3

Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is

Accepted Answer

A)   0.63 bushels of squash.
B)   1.6 bushels of squash.
C)   3 bushels of squash.
D)   5 bushels of squash.E) A) and C)
F) B) and C)

Question 4

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 farmer has a comparative advantage in the production of

Accepted Answer

A)   pork.
B)   tomatoes.
C)   both goods.
D)   neither good.E) None of the above
F) All of the above

Question 5

Figure 3-21
Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier 
-Refer to Figure 3-21. If Uzbekistan and Azerbaijan each spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 bolts for 36 nails, then

Accepted Answer

A)   neither Uzbekistan nor Azerbaijan will gain from this trade.
B)   Uzbekistan will gain from this trade, but Azerbaijan will not.
C)   Azerbaijan will gain from this trade, but Uzbekistan will not.
D)   both Uzbekistan and Azerbaijan will gain from this trade.E) All of the above
F) None of the above

Question 6

Figure 3-15
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier
 
-Refer to Figure 3-15. The opportunity cost of 1 poem for Jordan is

Accepted Answer

A)   1/2 novel.
B)   1/3 novel.
C)   3 novels.
D)   4 novels.E) None of the above
F) All of the above

Question 7

A production possibilities frontier is bowed outward when

Accepted Answer

A)   the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good.
B)   an economy is self-sufficient instead of interdependent and engaged in trade.
C)   the rate of tradeoff between the two goods being produced is constant.
D)   the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.E) A) and B)
F) None of the above

Question 8

Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour.

Accepted Answer

A)   Susan has an absolute advantage over Paul in washing windows.
B)   Susan has a comparative advantage over Paul in washing windows.
C)   Paul has a comparative advantage over Susan in ironing shirts.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 9

The opportunity cost of an item is

Accepted Answer

A)   the number of hours that one must work in order to buy one unit of the item.
B)   what you give up to get that item.
C)   always less than the dollar value of the item.
D)   always greater than the cost of producing the item.E) A) and C)
F) A) and D)

Question 10

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. Suppose Jamaica decides to increase its production of radios by 12. What is the opportunity cost of this decision?

Accepted Answer

A)   3 coolers
B)   6 coolers
C)   12 coolers
D)   24 coolersE) A) and B)
F) B) and C)

Question 11

Trade can make everybody better off because it

Accepted Answer

A)   increases cooperation among nations.
B)   allows people to specialize according to comparative advantage.
C)   requires some workers in an economy to be retrained.
D)   reduces competition among domestic companies.E) B) and C)
F) A) and B)

Question 12

Figure 3-16
Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier 
-Refer to Figure 3-16. Hosne's opportunity cost of one wallet is

Accepted Answer

A)   4/5 purse and Merve's opportunity cost of one wallet is 2/3 purse.
B)   4/5 purse and Merve's opportunity cost of one wallet is 3/2 purses.
C)   5/4 purses and Merve's opportunity cost of one wallet is 2/3 purse.
D)   5/4 purses and Merve's opportunity cost of one wallet is 3/2 purses.E) C) and D)
F) B) and C)

Question 13

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-26. Japan's opportunity cost of one car is

Accepted Answer

A)   1/5 airplane and Korea's opportunity cost of one car is 1/3 airplane.
B)   1/5 airplane and Korea's opportunity cost of one car is 3 airplanes.
C)   5 airplanes and Korea's opportunity cost of one car is 1/3 airplane.
D)   5 airplanes and Korea's opportunity cost of one car is 3 airplanes.E) B) and D)
F) None of the above

Question 14

Table 3-31
 
-Refer to Table 3-31. Relative to the rancher, the farmer has

Accepted Answer

A)   a comparative advantage in the production of meat, because the farmer's opportunity cost of a pound of meat is lower than the rancher's opportunity cost of a pound of meat.
B)   a comparative advantage in the production of potatoes, because the rancher requires less time than the farmer to produce a pound of potatoes.
C)   a comparative advantage in the production of potatoes; relative to the farmer, the rancher has a comparative advantage in the production of meat.
D)   an absolute advantage in the production of both meat and potatoes.E) None of the above
F) A) and B)

Question 15

Which of the following statements is not correct?

Accepted Answer

A)   Trade allows for specialization.
B)   Trade has the potential to benefit all nations.
C)   Trade allows nations to consume outside of their production possibilities curves.
D)   Absolute advantage is the driving force of specialization.E) B) and D)
F) None of the above

Question 16

If a country has the comparative advantage in producing a product, then that country must also have the absolute advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 17

Figure 3-2
Brazil's Production Possibilities Frontier 
-Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil not produce in two months?

Accepted Answer

A)   5 peanuts and 88 cashews
B)   4 peanuts and 115 cashews
C)   3 peanuts and 155 cashews
D)   1 peanuts and 200 cashewsE) C) and D)
F) None of the above

Question 18

Figure 3-24
The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time.
Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier
  
-Refer to Figure 3-24. Bob has

Accepted Answer

A)   an absolute and comparative advantage producing good x.
B)   an absolute but not a comparative advantage producing good x.
C)   a comparative but not an absolute advantage producing good x.
D)   neither a comparative nor an absolute advantage producing good x.E) B) and C)
F) A) and D)

Question 19

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. The opportunity cost of 1 unit of bread for Spain is

Accepted Answer

A)   1/2 unit of cheese.
B)   1/2 hour of labor.
C)   2 units of cheese.
D)   8 hours of labor.E) B) and D)
F) A) and B)

Question 20

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 C)
F) A) and D)

Exam 3: Interdependence and the Gains From Trade

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Jordan is

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 farmer has a comparative advantage in the production of

Correct Answer
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Figure 3-24 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-24. Bob has

Correct Answer
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Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil not produce in two months?

Correct Answer
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The opportunity cost of an item is

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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. The opportunity cost of 1 unit of bread for Spain is

Correct Answer
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Table 3-31 -Refer to Table 3-31. Relative to the rancher, the farmer has

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

Correct Answer
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Trade can make everybody better off because it

Correct Answer
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Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Japan's opportunity cost of one car is

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Hosne's opportunity cost of one wallet is

Correct Answer
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A production possibilities frontier is bowed outward when

Correct Answer
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If a country has the comparative advantage in producing a product, then that country must also have the absolute advantage in producing that product.

Correct Answer
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Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour.

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

Correct Answer
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By definition, imports are

Correct Answer
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Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Jordan is

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 farmer has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-24 The production possibilities frontiers below show how much Bob and Betty can each produce in 8 hours of time. Bob's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-24. Bob has

Correct AnswerverifiedShow Answer

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. If the production possibilities frontier shown is for two months of production, then which of the following combinations of peanuts and cashews could Brazil not produce in two months?

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The opportunity cost of an item is

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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. The opportunity cost of 1 unit of bread for Spain is

Correct AnswerverifiedShow Answer

Table 3-31 -Refer to Table 3-31. Relative to the rancher, the farmer has

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

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Trade can make everybody better off because it

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Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Japan's opportunity cost of one car is

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Which of the following statements is not correct?

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Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Hosne's opportunity cost of one wallet is

Correct AnswerverifiedShow Answer

A production possibilities frontier is bowed outward when

Correct AnswerverifiedShow Answer

If a country has the comparative advantage in producing a product, then that country must also have the absolute advantage in producing that product.

Correct AnswerverifiedShow Answer

Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour.

Correct AnswerverifiedShow Answer

The gains from specialization and trade are based on advantage.

Correct AnswerverifiedShow Answer

By definition, imports are

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Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is

Correct AnswerverifiedShow Answer

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