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Exam 3: Interdependence and the Gains From Trade

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Question 21

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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. Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of this decision?

A) 3 airplanes
B) 6 airplanes
C) 16 airplanes
D) 150 airplanes

E) B) and D)
F) All of the above

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Question 22

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Figure 3-9 -Refer to Figure 3-9. Suppose Azerbaijan decides to increase its production of nails by 20. What is the opportunity cost of this decision?

A) 1/4 bolt
B) 4 bolts
C) 5 bolts
D) 80 bolts

E) None of the above
F) A) and D)

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Question 23

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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. Japan's opportunity cost of one car is

Figure 3-10 Alice and Betty's Production Possibilities in one 8-hour day. -Refer to Figure 3-10. If Alice produces only lemonade, she can produce

Figure 3-4 -Refer to Figure 3-4. If Jordan must work 3 months to write each novel, then her production possibilities frontier is based on how many months of work?

Figure 3-7 -Refer to Figure 3-7. The opportunity cost of 1 cup for Juba is

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. The opportunity cost of 1 plate for Min is

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Sylvania will now be able to consume a maximum of

It is possible for the U.S. to gain from trade with Germany even if it takes U.S. workers fewer hours to produce every good than it takes German workers.

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. England should specialize in the production of

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. Assume that England and Spain each has 40 labor hours available. If each country divides its time equally between the production of cheese and bread, then total production is

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4. The farmer has a comparative advantage in the production of

Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2. Aruba should specialize in the production of

When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy

Figure 3-9 -Refer to Figure 3-9. Suppose Uzbekistan decides to increase its production of bolts by 10. What is the opportunity cost of this decision?

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.

Figure 3-6 -Refer to Figure 3-6. Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in making tarts?

Figure 3-4 -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 write in a given year?

Table 3-17 US and French Production Opportunities -Refer to Table 3-17 The opportunity costs for the US and France are as follows:

Figure 3-1 -Refer to Figure 3-1. The rate of tradeoff between producing chairs and producing couches depends on how many chairs and couches are being produced in