Question 1

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) C) and D)

Question 2

Shannon bakes cookies and Justin grows vegetables.In which of the following cases is it impossible for both Shannon and Justin to benefit from trade?

Accepted Answer

A)   Shannon does not like vegetables and Justin does not like cookies.
B)   Shannon is better than Justin at baking cookies and Justin is better than Shannon at growing vegetables.
C)   Justin is better than Shannon at baking cookies and at growing vegetables.
D)   Both Shannon and Justin can benefit from trade in all of the above cases.E) All of the above
F) C) and D)

Question 3

Figure 3-6
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier  
-Refer to Figure 3-6.At which of the following prices would both Maxine and Daisy gain from trade with each other?

Accepted Answer

A)   4 tarts for 2 pies
B)   8 tarts for 12 pies
C)   12 tarts for 28 pies
D)   Maxine and Daisy could not both gain from trade with each other at any price.E) All of the above
F) C) and D)

Question 4

Figure 3-6
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier  
-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 C)

Question 5

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

Question 6

Figure 3-4
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier  
-Refer to Figure 3-4.Perry has a comparative advantage in the production of

Accepted Answer

A)   novels and Jordan has a comparative advantage in the production of poems.
B)   poems and Jordan has a comparative advantage in the production of novels.
C)   novels and Jordan has a comparative advantage in the production of neither good.
D)   neither good and Jordan has a comparative advantage in the production of novels.E) A) and C)
F) None of the above

Question 7

Table 3-1
Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate.
 
-Refer to Table 3-1.Assume that Sardi and Tinaka 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 corn and 6 pounds of pork.
B)   3.5 bushels of corn and 5.5 pounds of pork.
C)   4 bushels of corn and 5 pounds of pork.
D)   7 bushels of corn and 11 pounds of pork.E) All of the above
F) A) and D)

Question 8

Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.
 
-Refer to Table 3-6.The opportunity cost of 1 dress for Carlos is

Accepted Answer

A)   1/2 quilt.
B)   2 hours of labor.
C)   2 quilts.
D)   45 hours of labor.E) None of the above
F) A) and B)

Question 9

For two individuals who engage in the same two productive activities,it is impossible for one of the two individuals to

Accepted Answer

A)   have a comparative advantage in both activities.
B)   have an absolute advantage in both activities.
C)   be more productive per unit of time in both activities.
D)   gain from trade with each other.E) All of the above
F) B) and D)

Question 10

Figure 3-4
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier  
-Refer to Figure 3-4.If the production possibilities frontiers shown are each for one year of writing,then which of the following combinations of novels and poems could Perry and Jordan together not write in a given year?

Accepted Answer

A)   1 novel and 21 poems
B)   2 novels and 20 poems
C)   3 novels and 15 poems
D)   5 novels and 6 poemsE) B) and C)
F) A) and C)

Question 11

What must be given up to obtain an item is called

Accepted Answer

A)   out-of-pocket cost.
B)   comparative worth.
C)   opportunity cost.
D)   absolute value.E) C) and D)
F) A) and B)

Question 12

Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes.Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes.Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem.

Accepted Answer

A) True 
 B)False

Question 13

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's opportunity cost of one hairbrush is

Accepted Answer

A)   3/10 toothbrush and Portugal's opportunity cost of one hairbrush is 5/6 toothbrush.
B)   3/10 toothbrush and Portugal's opportunity cost of one hairbrush is 6/5 toothbrushes.
C)   10/3 toothbrushes and Portugal's opportunity cost of one hairbrush is 5/6 toothbrush.
D)   10/3 toothbrushes and Portugal's opportunity cost of one hairbrush is 6/5 toothbrushes.E) C) and D)
F) B) and D)

Question 14

Figure 3-4
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier  
-Refer to Figure 3-4.Perry should specialize in the production of

Accepted Answer

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

Question 15

If one producer has the absolute advantage in the production of all goods,then that same producer will have the comparative advantage in the production of all goods as well.

Accepted Answer

A) True 
 B)False

Question 16

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
 
-Refer to Table 3-7.Assume that Japan and Korea each has 2400 hours available.If each country spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 cars for 6 airplanes,then

Accepted Answer

A)   Japan and Korea will both gain from this trade.
B)   Japan will gain from this trade,but Korea will not.
C)   Korea will gain from this trade,but Japan will not.
D)   neither Japan nor Korea will gain from this trade.E) A) and C)
F) B) and D)

Question 17

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.Jim has an absolute advantage in

Accepted Answer

A)   both setting up and testing computers and a comparative advantage in setting up computers.
B)   both setting up and testing computers and a comparative advantage in testing computers.
C)   neither setting up nor testing computers and a comparative advantage in setting up computers.
D)   neither setting up nor testing computers and a comparative advantage in testing computers.E) A) and C)
F) A) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.
 
-Refer to Table 3-6.Which of the following combinations of quilts and dresses could Hilda produce in 90 hours?

Accepted Answer

A)   1.5 quilts and 5 dresses.
B)   2 quilts and 3 dresses.
C)   2.5 quilts and 2 dresses.
D)   3 quilts and 1 dress.E) All of the above
F) A) and B)

Question 20

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.Which of the following statements is true?

Accepted Answer

A)   Both countries could gain from trade with each other.
B)   Neither country could gain from trade with each other because Cornland has an absolute advantage in both goods.
C)   Neither country could gain from trade with each other because neither one has a comparative advantage.
D)   Oatland could gain from trade between the two countries,but Cornland definitively would lose.E) None of the above
F) A) and B)

Exam 3: Interdependence and the Gains From Trade

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's opportunity cost of one hairbrush is

Correct Answer
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Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.The opportunity cost of 1 dress for Carlos is

Correct Answer
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Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.Which of the following combinations of quilts and dresses could Hilda produce in 90 hours?

Correct Answer
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Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Perry should specialize in the production of

Correct Answer
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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.Jim has an absolute advantage in

Correct Answer
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Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes.Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes.Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem.

Correct Answer
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What must be given up to obtain an item is called

Correct Answer
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Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Perry has a comparative advantage in the production of

Correct Answer
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Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.Which of the following statements is true?

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

Correct Answer
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Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.Maxine has an absolute advantage in the production of

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 bread for Spain is

Correct Answer
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Shannon bakes cookies and Justin grows vegetables.In which of the following cases is it impossible for both Shannon and Justin to benefit from trade?

Correct Answer
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Correct Answer
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For two individuals who engage in the same two productive activities,it is impossible for one of the two individuals to

Correct Answer
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Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.At which of the following prices would both Maxine and Daisy gain from trade with each other?

Correct Answer
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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

If one producer has the absolute advantage in the production of all goods,then that same producer will have the comparative advantage in the production of all goods as well.

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

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's opportunity cost of one hairbrush is

Correct AnswerverifiedShow Answer

Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.The opportunity cost of 1 dress for Carlos is

Correct AnswerverifiedShow Answer

Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.Which of the following combinations of quilts and dresses could Hilda produce in 90 hours?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Perry should specialize in the production of

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.Jim has an absolute advantage in

Correct AnswerverifiedShow Answer

Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes.Ming-la can complete an oil change in 30 minutes and she can write a poem in 90 minutes.Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity cost of writing a poem.

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What must be given up to obtain an item is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.Perry has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.Which of the following statements is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.Maxine has an absolute advantage in the production of

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 bread for Spain is

Correct AnswerverifiedShow Answer

Shannon bakes cookies and Justin grows vegetables.In which of the following cases is it impossible for both Shannon and Justin to benefit from trade?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For two individuals who engage in the same two productive activities,it is impossible for one of the two individuals to

Correct AnswerverifiedShow Answer

Figure 3-6 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-6.At which of the following prices would both Maxine and Daisy gain from trade with each other?

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

If one producer has the absolute advantage in the production of all goods,then that same producer will have the comparative advantage in the production of all goods as well.

Correct AnswerverifiedShow Answer

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