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Exam 3: Interdependence and the Gains from Trade.

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Question 131

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Figure 3-5 -Refer to Figure 3-5.Merve should specialize in the production of

A) purses.
B) wallets.
C) both goods.
D) neither good.

E) None of the above
F) All of the above

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Question 132

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

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

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

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Question 133

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Table 3-13 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-13.If the production possibilities frontier is a straight line,then "?" must be

The gains from trade are

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.Which of the following points would not be on Barb's production possibilities frontier,based on a 40-hour week?

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

Figure 3-1 -Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches is constant in

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.Which of the following points would not be on Huang's production possibilities frontier,based on a 36-hour production period?

Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks.Which of the following is not possible?

Figure 3-3 -Refer to Figure 3-3.If Arturo and Dina each divides his/her time equally between the production of tacos and burritos,then total production is

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.

People who provide you with goods and services

Figure 3-9 -Refer to Figure 3-9.Uzbekistan should specialize in the production of

Figure 3-3 -Refer to Figure 3-3.If Dina must work 0.25 hour to produce each taco,then her production possibilities frontier is based on how many hours of work?

Figure 3-9 -Refer to Figure 3-9.Suppose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan.Which of the following combinations of bolts and nails could Uzbekistan then consume,assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

Figure 3-8 -Refer to Figure 3-8.Chile should specialize in the production of

Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day,and a worker in Felinia can produce either 5 blankets or 1 meal per day.Each nation has 10 workers.For many years,the two countries traded,each completely specializing according to their respective comparative advantages.Now war has broken out between them and all trade has stopped.Without trade,Caninia produces and consumes 10 blankets and 40 meals per day and Felinia produces and consumes 25 blankets and 5 meals per day.The war has caused the combined daily output of the two countries to decline by

David Ricardo was the author of the 1817 book Principles of Political Economy and Taxation.

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.If the production possibilities frontier shown is for 240 hours of production,then how long does it take Bonovia to make one pound of cheese?

Figure 3-8 -Refer to Figure 3-8.If Chile and Colombia switch from each country dividing its time equally between the production of coffee and soybeans to each country spending all of its time producing the good in which it has a comparative advantage,then total production of soybeans will increase by