Question 1

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 bread along the horizontal axis, then

Accepted Answer

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.

Question 2

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

Accepted Answer

A)   8 bushels of wheat and 15 yards of cloth.
B)   14 bushels of wheat and 27 yards of cloth.
C)   16 bushels of wheat and 30 yards of cloth.
D)   28 bushels of wheat and 34 yards of cloth.

Question 3

Table 3-7
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. 
-Refer to Table 3-7. Assume that the farmer and the rancher each has 24 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

Accepted Answer

A)   6 pounds of meat and 4.5 pounds of potatoes.
B)   5.5 pounds of meat and 8 pounds of potatoes.
C)   12 pounds of meat and 9 pounds of potatoes.
D)   5 pounds of meat and 5.5 pounds of potatoes.

Question 4

What does a consumption possibilities frontier represent?

Accepted Answer

The combinations of ...

Question 5

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

Accepted Answer

The answer of Table 3-41 
-Refer to Table 3-41. What...

Question 6

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.

Question 7

Table 3-10
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. 
-Refer to Table 3-10. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring cars along the horizontal axis, then

Accepted Answer

A)   the slope of Japan's production possibilities frontier would be ­5 and the slope of Korea's production possibilities frontier would be -3.
B)   the slope of Japan's production possibilities frontier would be ­0.2 and the slope of Korea's production possibilities frontier would be -0.33.
C)   the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
D)   the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.

Question 8

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. Assume that the farmer and the rancher each has 24 labor hours 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)   4 pounds of pork and 6 pounds of tomatoes.
B)   6 pounds of pork and 8 pounds of tomatoes.
C)   4 pounds of pork and 8 pounds of tomatoes.
D)   6 pounds of pork and 6 pounds of tomatoes.

Question 9

If labor in Mexico is less productive than labor in the United States in all areas of production,

Accepted Answer

A)   then neither nation can benefit from trade.
B)   then Mexico can benefit from trade but the United States cannot.
C)   then the United States will have a comparative advantage relative to Mexico in the production of all goods.
D)   then both Mexico and the United States still can benefit from trade.

Question 10

Table 3-31   -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is A)  4.0 pounds of potatoes. B)  5.2 pounds of potatoes. C)  6.4 pounds of potatoes. D)  9.6 pounds of potatoes." class="answers-bank-image d-inline" rel="preload" >  
-Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Accepted Answer

A)   4.0 pounds of potatoes.
B)   5.2 pounds of potatoes.
C)   6.4 pounds of potatoes.
D)   9.6 pounds of potatoes.

Question 11

Which famous economist developed the principle of comparative advantage as we know it today?

Accepted Answer

A)   Adam Smith
B)   David Ricardo
C)   John Maynard Keynes
D)   Milton Friedman

Question 12

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Accepted Answer

No, their opportunit...

Question 13

Table 3-27
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. 
-Refer to Table 3-27. Min has an absolute advantage in the production of

Accepted Answer

A)   plates and a comparative advantage in the production of plates.
B)   parasols and a comparative advantage in the production of plates.
C)   neither good and a comparative advantage in the production of parasols.
D)   neither good and a comparative advantage in the production of plates.

Question 14

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that

Accepted Answer

A)   Ken has an absolute advantage in chairs.
B)   Ken has a comparative advantage in tables.
C)   Traci has an absolute advantage in chairs.
D)   Traci has a comparative advantage in chairs.

Question 15

Figure 3-17
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier 
-Refer to Figure 3-17. 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.

Question 16

Figure 3-15
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier 
-Refer to Figure 3-15. Perry should specialize in the production of

Accepted Answer

A)   novels.
B)   poems.
C)   both goods.
D)   neither good.

Question 17

Table 3-35 
-Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

Accepted Answer

A)   2/3 pounds of ham per dozen eggs.
B)   1 pound of ham per dozen eggs.
C)   1.4 pounds of ham per dozen eggs.
D)   None of the above are correct.

Question 18

In most countries today, many goods and services consumed are imported from abroad, and many goods and services produced are exported to foreign customers.

Accepted Answer

A) True 
 B)False

Question 19

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 5 televisions per year. Each nation has 100 workers, and each country specializes according to the principle of comparative advantage. If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year, then each country's maximum consumption of new radios and televisions per year will be

Accepted Answer

A)   higher than it would be in the absence of trade because of the gains from trade.
B)   the same as it would be in the absence of trade.
C)   less than it would be in the absence of trade because neither country is specializing in the product in which it has a comparative advantage.
D)   less than it would be in the absence of trade because Teeveeland has an absolute advantage in both goods and so it cannot benefit by trading with Radioland.

Question 20

Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then

Accepted Answer

A)   Dave has a comparative advantage in the production of sweaters.
B)   Caroline has a comparative advantage in the production of sweaters.
C)   Dave has a comparative advantage in the production of socks.
D)   Dave has a comparative advantage in the production of both sweaters and socks.

Exam 3: Interdependence and the Gains From Trade

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Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then

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Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. Min has an absolute advantage in the production of

Correct Answer
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Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. Perry should specialize in the production of

Correct Answer
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Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Maxine has an absolute advantage in the production of

Correct Answer
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In most countries today, many goods and services consumed are imported from abroad, and many goods and services produced are exported to foreign customers.

Correct Answer
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Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

Correct Answer
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Which famous economist developed the principle of comparative advantage as we know it today?

Correct Answer
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Table 3-35 -Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

Correct Answer
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If labor in Mexico is less productive than labor in the United States in all areas of production,

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

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

Correct Answer
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What does a consumption possibilities frontier represent?

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The combinations of ...
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Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that

Correct Answer
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Correct Answer
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With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Correct Answer
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No, their opportunit...
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Correct Answer
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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

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then

Correct AnswerverifiedShow Answer

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. Min has an absolute advantage in the production of

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Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. Perry should specialize in the production of

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Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Maxine has an absolute advantage in the production of

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In most countries today, many goods and services consumed are imported from abroad, and many goods and services produced are exported to foreign customers.

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Table 3-31 -Refer to Table 3-31. For the rancher, the opportunity cost of 16 pounds of meat is

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Which famous economist developed the principle of comparative advantage as we know it today?

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Table 3-35 -Refer to Table 3-35. At which of the following prices, if any, could both Denmark and Finland gain from trade?

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If labor in Mexico is less productive than labor in the United States in all areas of production,

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For a self-sufficient producer, the production possibilities frontier

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

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What does a consumption possibilities frontier represent?

Correct AnswerverifiedThe combinations of ...View AnswerShow Answer

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas. With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas. Can Elmer and Bugs gain from trade? Defend your answer.

Correct AnswerverifiedNo, their opportunit...View AnswerShow Answer

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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

Correct AnswerverifiedShow Answer

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The combinations of ...
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No, their opportunit...
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