Question 1

In an economy consisting of two people producing two goods, it is possible for one person to have the absolute advantage and the comparative advantage in both goods.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not an example of the principle that trade can make everyone better off?

Accepted Answer

A)   Americans buy tube socks from China.
B)   Residents of Maine drink orange juice from Florida.
C)   A homeowner hires the kid next door to mow the lawn.
D)   All of the above are examples of the principle that trade can make everyone better off.E) All of the above
F) A) and D)

Question 3

Figure 3-6
   
-Refer to Figure 3-6. If Maxine and Daisy each divides her time equally between making pies and making tarts, then total production is

Accepted Answer

A)   6 pies and 10 tarts.
B)   7.5 pies and 3 tarts.
C)   7.5 pies and 10 tarts.
D)   13.5 pies and 13 tarts.E) A) and B)
F) A) and C)

Question 4

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Accepted Answer

A) True 
 B)False

Question 5

Table 3-6
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
 
-Refer to Table 3-6. Maya has an absolute advantage in the production of

Accepted Answer

A)   both goods and a comparative advantage in the production of mixers.
B)   both goods and a comparative advantage in the production of toasters.
C)   neither good and a comparative advantage in the production of mixers.
D)   neither good and a comparative advantage in the production of toasters.E) A) and B)
F) C) and D)

Question 6

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. What is Andia's opportunity cost of producing one pound of beef?

Accepted Answer

A)   3/5 bushel of wheat
B)   6/5 bushels of wheat
C)   4/3 bushels of wheat
D)   5/3 bushels of wheatE) A) and B)
F) B) and D)

Question 7

Table 3-17
US and French Production Opportunities
 
-Refer to Table 3-17 The US has a comparative advantage in the production of

Accepted Answer

A)   wine.
B)   cheese.
C)   both wine and cheese.
D)   neither wine nor cheese.E) A) and B)
F) B) and D)

Question 8

Figure 3-6
   
-Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Accepted Answer

A)   2 pies and 25 tarts
B)   10 pies and 22 tarts
C)   12 pies and 15 tarts
D)   15 pies and 16 tartsE) A) and D)
F) B) and C)

Question 9

Table 3-16 Summary of the Gains from Trade
 
-Refer to Table 3-16. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?

Accepted Answer

A)   Alice gains 7 pitchers of lemonade and 10 pizzas, while Betty gains 13 pitchers of lemonade and 10 pizzas.
B)   Alice gains 200 pitchers of lemonade and 100 pizzas, while Betty gains 180 pitchers of lemonade and 180 pizzas.
C)   Alice gains 207 pitchers of lemonade and 110 pizzas, while Betty gains 193 pitchers of lemonade and 190 pizzas.
D)   Alice gains 400 pitchers of lemonade and 0 pizzas, while Betty gains 0 pitchers of lemonade and 300 pizzas.E) B) and D)
F) B) and C)

Question 10

Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
 
-Refer to Table 3-8. Huang has an absolute advantage in the production of

Accepted Answer

A)   parasols and a comparative advantage in the production of parasols.
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.E) B) and D)
F) None of the above

Question 11

Table 3-18
Chris and Tony's Production Opportunities
 
-Which of the following is not correct?

Accepted Answer

A)   Economists are generally united in their support of free trade.
B)   The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time.
C)   David Ricardo argued that Britain should not restrict imports of grain.
D)   Economists' opposition to trade restrictions is still based largely on the principle of absolute advantage.E) A) and B)
F) B) and C)

Question 12

Figure 3-7
   
-Refer to Figure 3-7. If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage, then total production will increase by

Accepted Answer

A)   1 bowl and 1 cup.
B)   2 bowls and 4 cups.
C)   3 bowls and 5 cups.
D)   4 bowls and 8 cups.E) B) and D)
F) A) and B)

Question 13

Table 3-18
Chris and Tony's Production Opportunities
 
-Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 30 workers in each country. No trade occurs between the two countries. Boatland produces and consumes 75 units of wheat and 375 units of fish per year while Farmland produces and consumes 375 units of wheat and 75 units of fish per year. If trade were to occur, Boatland would trade 90 units of fish to Farmland in exchange for 80 units of wheat. If Boatland now completely specializes in fish production, how many units of fish could it now consume along with the 80 units of imported wheat?

Accepted Answer

A)   490 units
B)   500 units
C)   610 units
D)   660 unitsE) A) and D)
F) B) and C)

Question 14

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Accepted Answer

A)   neither person faces trade-offs.
B)   the frontiers are straight lines.
C)   the frontiers are bowed out.
D)   they choose not to trade with one another.E) B) and C)
F) A) and D)

Question 15

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

A certain cowboy spends 10 hours per day mending fences and herding cattle. For the cowboy, a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day)  is called his

Accepted Answer

A)   line of tastes.
B)   trade-off curve.
C)   production possibilities frontier.
D)   consumption possibilities frontier.E) B) and C)
F) A) and D)

Question 18

Figure 3-8
   
-Refer to Figure 3-8. Chile has an absolute advantage in the production of

Accepted Answer

A)   coffee and Colombia has an absolute advantage in the production of soybeans.
B)   soybeans and Colombia has an absolute advantage in the production of coffee.
C)   both goods and Colombia has an absolute advantage in the production of neither good.
D)   neither good and Colombia has an absolute advantage in the production of both goods.E) A) and C)
F) A) and B)

Question 19

Figure 3-5
   
-Refer to Figure 3-5. Hosne has an absolute advantage in the production of

Accepted Answer

A)   purses and Merve has an absolute advantage in the production of wallets.
B)   wallets and Merve has an absolute advantage in the production of purses.
C)   both goods and Merve has an absolute advantage in the production of neither good.
D)   neither good and Merve has an absolute advantage in the production of both goods.E) B) and C)
F) A) and D)

Question 20

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. Portugal has an absolute advantage in the production of

Accepted Answer

A)   toothbrushes and a comparative advantage in the production of toothbrushes.
B)   toothbrushes and a comparative advantage in the production of hairbrushes.
C)   hairbrushes and a comparative advantage in the production of toothbrushes.
D)   hairbrushes and a comparative advantage in the production of hairbrushes.E) None of the above
F) A) and B)

Exam 3: Interdependence and the Gains From Trade

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. What is Andia's opportunity cost of producing one pound of beef?

Correct Answer
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A certain cowboy spends 10 hours per day mending fences and herding cattle. For the cowboy, a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day) is called his

Correct Answer
verified

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Correct Answer
verified

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6. Maya has an absolute advantage in the production of

Correct Answer
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Figure 3-6 -Refer to Figure 3-6. If Maxine and Daisy each divides her time equally between making pies and making tarts, then total production is

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
verified

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. Portugal has an absolute advantage in the production of

Correct Answer
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Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8. Huang has an absolute advantage in the production of

Correct Answer
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Correct Answer
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Figure 3-8 -Refer to Figure 3-8. Chile has an absolute advantage in the production of

Correct Answer
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In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Correct Answer
verified

Figure 3-5 -Refer to Figure 3-5. Hosne has an absolute advantage in the production of

Correct Answer
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Table 3-18 Chris and Tony's Production Opportunities -Which of the following is not correct?

Correct Answer
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Figure 3-7 -Refer to Figure 3-7. If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage, then total production will increase by

Correct Answer
verified

Figure 3-6 -Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Correct Answer
verified

Table 3-16 Summary of the Gains from Trade -Refer to Table 3-16. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?

Correct Answer
verified

Which of the following is not an example of the principle that trade can make everyone better off?

Correct Answer
verified

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Correct Answer
verified

Table 3-17 US and French Production Opportunities -Refer to Table 3-17 The US has a comparative advantage in the production of

Correct Answer
verified

In an economy consisting of two people producing two goods, it is possible for one person to have the absolute advantage and the comparative advantage in both goods.

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

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. What is Andia's opportunity cost of producing one pound of beef?

Correct AnswerverifiedShow Answer

A certain cowboy spends 10 hours per day mending fences and herding cattle. For the cowboy, a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day) is called his

Correct AnswerverifiedShow Answer

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Correct AnswerverifiedShow Answer

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6. Maya has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-6 -Refer to Figure 3-6. If Maxine and Daisy each divides her time equally between making pies and making tarts, then total production is

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

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. Portugal has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8. Huang has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-8 -Refer to Figure 3-8. Chile has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

In one month, Moira can knit 2 sweaters or 4 scarves. In one month, Tori can knit 1 sweater or 3 scarves. Moira's opportunity cost of knitting scarves is lower than Tori's opportunity cost of knitting scarves.

Correct AnswerverifiedShow Answer

Figure 3-5 -Refer to Figure 3-5. Hosne has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Table 3-18 Chris and Tony's Production Opportunities -Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 3-7 -Refer to Figure 3-7. If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage, then total production will increase by

Correct AnswerverifiedShow Answer

Figure 3-6 -Refer to Figure 3-6. If the production possibilities frontiers shown are each for one day of work, then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

Correct AnswerverifiedShow Answer

Table 3-16 Summary of the Gains from Trade -Refer to Table 3-16. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?

Correct AnswerverifiedShow Answer

Which of the following is not an example of the principle that trade can make everyone better off?

Correct AnswerverifiedShow Answer

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

Correct AnswerverifiedShow Answer

Table 3-17 US and French Production Opportunities -Refer to Table 3-17 The US has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

In an economy consisting of two people producing two goods, it is possible for one person to have the absolute advantage and the comparative advantage in both goods.

Correct AnswerverifiedShow Answer

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