Question 1

Figure 3-19
Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier 
-Refer to Figure 3-19. If Chile and Colombia each spends all of its time producing the good in which it has a comparative advantage and the countries agree to trade 7 pounds of coffee for 5 pounds of soybeans, then Chile will consume

Accepted Answer

A)   7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans.
B)   7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans.
C)   23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans.
D)   23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans.E) A) and B)
F) C) and D)

Question 2

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 C)
F) A) and B)

Question 3

Table 3-25
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. 
-Refer to Table 3-25. The opportunity cost of 1 mixer for Maya is

Accepted Answer

A)   0.625 toasters.
B)   5 hours of labor.
C)   1.6 toasters.
D)   20 hours of labor.E) C) and D)
F) B) and D)

Question 4

Table 3-41 
-Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing radios?

Accepted Answer

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

Question 5

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier 
-Refer to Figure 3-26. Who has a comparative advantage in making muffins?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 6

Figure 3-23
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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Accepted Answer

A)   Cropitia can produce more than 400 pounds of ham per month.
B)   Cropitia can produce more than 320 pounds of cheese per month.
C)   Cropitia's opportunity cost of producing a pound of ham is less than 0.8 pounds of cheese.
D)   Cropitia's opportunity cost of producing a pound of ham is greater than 0.8 pounds of cheese.E) B) and C)
F) A) and B)

Question 7

Adam Smith asserted that a person should never attempt to make at home

Accepted Answer

A)   what it will cost him more to make than to buy.
B)   any good in which that person does not have an absolute advantage.
C)   any luxury good.
D)   any necessity.E) C) and D)
F) A) and B)

Question 8

If Wrex can produce more math problems per hour and more book reports per hour than Maxine can, then Wrex cannot gain from trading math problems and book reports with Maxine.

Accepted Answer

A) True 
 B)False

Question 9

Figure 3-18
Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier 
-Refer to Figure 3-18. Bintu has a comparative advantage in the production of

Accepted Answer

A)   bowls and Juba has a comparative advantage in the production of cups.
B)   cups and Juba has a comparative advantage in the production of bowls.
C)   both goods and Juba has a comparative advantage in the production of neither good.
D)   neither good and Juba has a comparative advantage in the production of both goods.E) B) and D)
F) None of the above

Question 10

Table 3-9
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. 
-Refer to Table 3-9. Which of the following combinations of mixers and toasters could Maya produce in 60 hours?

Accepted Answer

A)   5 mixers and 12 toasters.
B)   6 mixers and 4 toasters.
C)   7 mixers and 7 toasters.
D)   8 mixers and 5 toasters.E) A) and B)
F) A) and C)

Question 11

Table 3-36 
-Refer to Table 3-36. Antigua has an absolute advantage in the production of

Accepted Answer

A)   towels and Barbuda has an absolute advantage in the production of umbrellas.
B)   umbrellas and Barbuda has an absolute advantage in the production of towels.
C)   both goods and Barbuda has an absolute advantage in the production of neither good.
D)   neither good and Barbuda has an absolute advantage in the production of both goods.E) A) and D)
F) A) and C)

Question 12

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Accepted Answer

A) True 
 B)False

Question 13

Total output in an economy increases when each person specializes because

Accepted Answer

A)   there is less competition for the same resources.
B)   each person spends more time producing that product in which he or she has a comparative advantage.
C)   a wider variety of products will be produced within each country due to specialization.
D)   government necessarily plays a larger role in the economy due to specialization.E) None of the above
F) All of the above

Question 14

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Accepted Answer

Frank has the comparative adva...

Question 15

Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.

Accepted Answer

A) True 
 B)False

Question 16

By definition, exports are

Accepted Answer

A)   limits placed on the quantity of goods brought into a country.
B)   goods in which a country has an absolute advantage.
C)   people who work in foreign countries.
D)   goods produced domestically and sold abroad.E) B) and C)
F) A) and C)

Question 17

Table 3-33
Chris and Tony's Production Opportunities 
-Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct?

Accepted Answer

A)   Tony has a comparative advantage in the production of sauce.
B)   Chris has a comparative advantage in the production of tomatoes.
C)   Tony has an absolute advantage in the production of tomatoes.
D)   Chris has an absolute advantage in the production of tomatoes.E) B) and D)
F) A) and B)

Question 18

Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. 
-Refer to Table 3-26. Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

Accepted Answer

A)   1/5 airplane.
B)   1/3 airplane.
C)   3 airplanes.
D)   5 airplanes.E) A) and B)
F) A) and C)

Question 19

Figure 3-4
Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier 
-Refer to Figure 3-4. If the production possibilities frontiers shown are each for one year of production, then which of the following combinations of sweaters and jackets could Lisa and Bryce together not produce in a given year?

Accepted Answer

A)   1 sweater and 21 jackets
B)   2 sweaters and 20 jackets
C)   3 sweaters and 12 jackets
D)   5 sweaters and 4 jacketsE) A) and B)
F) A) and C)

Question 20

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20. Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

Accepted Answer

Since Julia's opportunity cost...

Exam 3: Interdependence and the Gains From Trade

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Correct Answer
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Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. Who has a comparative advantage in making muffins?

Correct Answer
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Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

Correct Answer
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Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-25. The opportunity cost of 1 mixer for Maya is

Correct Answer
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Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.

Correct Answer
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Table 3-41 -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing radios?

Correct Answer
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Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20. Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

Correct Answer
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Since Julia's opportunity cost...
View Answer

Table 3-9 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-9. Which of the following combinations of mixers and toasters could Maya produce in 60 hours?

Correct Answer
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Which of the following is not correct?

Correct Answer
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Table 3-33 Chris and Tony's Production Opportunities -Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct?

Correct Answer
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By definition, exports are

Correct Answer
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Table 3-36 -Refer to Table 3-36. Antigua has an absolute advantage in the production of

Correct Answer
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Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has a comparative advantage in the production of

Correct Answer
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Figure 3-23 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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Correct Answer
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Correct Answer
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Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Correct Answer
verified
Frank has the comparative adva...
View Answer

If Wrex can produce more math problems per hour and more book reports per hour than Maxine can, then Wrex cannot gain from trading math problems and book reports with Maxine.

Correct Answer
verified

Adam Smith asserted that a person should never attempt to make at home

Correct Answer
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Total output in an economy increases when each person specializes because

Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

Correct AnswerverifiedShow Answer

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26. Who has a comparative advantage in making muffins?

Correct AnswerverifiedShow Answer

Table 3-26 Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. -Refer to Table 3-26. Japan and Korea would not be able to gain from trade if Korea's opportunity cost of one car changed to

Correct AnswerverifiedShow Answer

Table 3-25 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-25. The opportunity cost of 1 mixer for Maya is

Correct AnswerverifiedShow Answer

Suppose Hank and Tony can both produce corn. If Hank's opportunity cost of producing a bushel of corn is 2 bushels of soybeans and Tony's opportunity cost of producing a bushel of corn is 3 bushels of soybeans, then Hank has the comparative advantage in the production of corn.

Correct AnswerverifiedShow Answer

Table 3-41 -Refer to Table 3-41. If the two countries decide to trade with each other, which country should specialize in producing radios?

Correct AnswerverifiedShow Answer

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20. Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain.

Correct AnswerverifiedSince Julia's opportunity cost...View AnswerShow Answer

Table 3-9 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-9. Which of the following combinations of mixers and toasters could Maya produce in 60 hours?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Table 3-33 Chris and Tony's Production Opportunities -Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

By definition, exports are

Correct AnswerverifiedShow Answer

Table 3-36 -Refer to Table 3-36. Antigua has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. Bintu has a comparative advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-23 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 3-23. The nation of Cropitia has a comparative advantage over Bonovia in producing ham if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Frank can make 20 hot dogs an hour or 10 pints of potato salad an hour. Earnest can make 30 hot dogs an hour or 20 pints of potato salad an hour. Who has the comparative advantage making hot dogs and who has the comparative advantage making potato salad?

Correct AnswerverifiedFrank has the comparative adva...View AnswerShow Answer

If Wrex can produce more math problems per hour and more book reports per hour than Maxine can, then Wrex cannot gain from trading math problems and book reports with Maxine.

Correct AnswerverifiedShow Answer

Adam Smith asserted that a person should never attempt to make at home

Correct AnswerverifiedShow Answer

Total output in an economy increases when each person specializes because

Correct AnswerverifiedShow Answer

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Since Julia's opportunity cost...
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Frank has the comparative adva...
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