Question 1

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. Assume that Maya and Miguel each has 60 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is

Accepted Answer

A)   8 mixers and 16 toasters.
B)   3.5 mixers and 6 toasters.
C)   15 mixers and 9 toasters.
D)   20 mixers and 12 toasters.E) B) and C)
F) All of the above

Question 2

Table 3-31
 
-Refer to Table 3-31. Relative to the rancher, the farmer has a comparative advantage in the production of

Accepted Answer

A)   meat, but not in the production of potatoes.
B)   potatoes, but not in the production of meat.
C)   both meat and potatoes.
D)   neither meat nor potatoes.E) All of the above
F) A) and D)

Question 3

Figure 3-14
Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier
 
-Refer to Figure 3-14. Arturo should specialize in the production of

Accepted Answer

A)   tacos and Dina should specialize in the production of burritos.
B)   burritos and Dina should specialize in the production of tacos.
C)   both goods and Dina should specialize in the production of neither good.
D)   neither good and Dina should specialize in the production of both goods.E) B) and C)
F) All of the above

Question 4

Table 3-24
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-24. The opportunity cost of 1 unit of cheese for Spain is

Accepted Answer

A)   1/2 unit of bread.
B)   2 hours of labor.
C)   2 units of bread.
D)   4 hours of labor.E) A) and B)
F) All of the above

Question 5

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. 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) A) and C)

Question 6

An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 7

Table 3-29
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
 
-Refer to Table 3-29. Shantala has an absolute advantage in

Accepted Answer

A)   programming cellular phones and a comparative advantage in programming cellular phones.
B)   programming cellular phones and a comparative advantage in testing cellular phones.
C)   testing cellular phones and a comparative advantage in programming cellular phones.
D)   testing cellular phones and a comparative advantage in testing cellular phones.E) A) and B)
F) A) and C)

Question 8

Table 3-34
Assume that Indonesia and India can switch between producing rice and bananas at a constant rate.
 
-Refer to Table 3-34. India's opportunity cost of producing rice is

Accepted Answer

A)   1/2 units of bananas. This is higher than Indonesia's opportunity cost of producing rice.
B)   1/2 units of bananas. This is lower than Indonesia's opportunity cost of producing rice.
C)   2 units of bananas. This is higher than Indonesia's opportunity cost of producing rice.
D)   2 units of bananas. This is lower than Indonesia's opportunity cost of producing rice.E) B) and D)
F) B) and C)

Question 9

Table 3-29
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
 
-Refer to Table 3-29. Juanita's opportunity cost of testing one cellular phone is programming

Accepted Answer

A)   0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
B)   0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.
C)   7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
D)   7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.E) B) and C)
F) A) and B)

Question 10

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 which of the following combinations of ham and cheese could Bonovia produce in 240 hours?

Accepted Answer

A)   225 pounds of ham and 140 pounds of cheese
B)   280 pounds of ham and 100 pounds of cheese
C)   355 pounds of ham and 80 pounds of cheese
D)   330 pounds of ham and 60 pounds of cheeseE) None of the above
F) A) and C)

Question 11

Figure 3-1
Panel a)  Panel b)  
-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

Accepted Answer

A)   Panel a) .
B)   Panel b) .
C)   both Panel a)  and Panel b) .
D)   neither Panel a)  nor Panel b) .E) None of the above
F) A) and D)

Question 12

Figure 3-18
Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier 
-Refer to Figure 3-18. The opportunity cost of 1 bowl for Bintu is

Accepted Answer

A)   1/4 cup.
B)   1/2 cup.
C)   2 cups.
D)   4 cups.E) A) and B)
F) A) and C)

Question 13

Table 3-7
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
 
-Refer to Table 3-7. Assume that the farmer and the rancher each has 24 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

Accepted Answer

A)   6 pounds of meat and 4.5 pounds of potatoes.
B)   5.5 pounds of meat and 8 pounds of potatoes.
C)   12 pounds of meat and 9 pounds of potatoes.
D)   5 pounds of meat and 5.5 pounds of potatoes.E) None of the above
F) A) and D)

Question 14

Figure 3-19
Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier 
-Refer to Figure 3-19. 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) All of the above
F) B) and D)

Question 15

Table 3-27
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
 
-Refer to Table 3-27. Assume that Huang and Min each has 36 labor hours available. Originally, each person divided his/her time equally between the production of parasols and plates. Now, each person spends all their time producing the good in which they have a comparative advantage. As a result, the total output of plates increased by

Accepted Answer

A)   0.
B)   1.5.
C)   3.
D)   9.E) A) and C)
F) None of the above

Question 16

Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-22. Suppose Zimbabwe decides to increase its production of toothbrushes by 10. What is the opportunity cost of this decision?

Accepted Answer

A)   0.3 hairbrush
B)   3 hairbrushes
C)   30 hairbrushes
D)   100 hairbrushesE) C) and D)
F) B) and D)

Question 17

Define comparative advantage.

Accepted Answer

Comparative advantage means a ...

Question 18

If labor in Mexico is less productive than labor in the United States in all areas of production,

Accepted Answer

A)   then neither nation can benefit from trade.
B)   then Mexico can benefit from trade but the United States cannot.
C)   then the United States will have a comparative advantage relative to Mexico in the production of all goods.
D)   then both Mexico and the United States still can benefit from trade.E) B) and C)
F) A) and B)

Question 19

Table 3-36
 
-Refer to Table 3-36. What is Barbuda's opportunity cost of one towel?

Accepted Answer

A)   3/5 umbrellas
B)   2/3 umbrellas
C)   3/2 umbrellas
D)   5/3 umbrellasE) A) and B)
F) A) and C)

Question 20

The most obvious benefit of specialization and trade is that they allow us to

Accepted Answer

A)   work more hours per week than we otherwise would be able to work.
B)   consume more goods than we otherwise would be able to consume.
C)   spend more money on goods that are beneficial to society, and less money on goods that are harmful to society.
D)   consume more goods by forcing people in other countries to consume fewer goods.E) C) and D)
F) B) and C)

Exam 3: Interdependence and the Gains From Trade

Table 3-31 -Refer to Table 3-31. Relative to the rancher, the farmer has a comparative advantage in the production of

Correct Answer
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Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Suppose Zimbabwe decides to increase its production of toothbrushes by 10. What is the opportunity cost of this decision?

Correct Answer
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The most obvious benefit of specialization and trade is that they allow us to

Correct Answer
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Table 3-29 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. -Refer to Table 3-29. Shantala has an absolute advantage in

Correct Answer
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Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-24. The opportunity cost of 1 unit of cheese for Spain is

Correct Answer
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Define comparative advantage.

Correct Answer
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Comparative advantage means a ...
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An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier.

Correct Answer
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Table 3-34 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-34. India's opportunity cost of producing rice is

Correct Answer
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Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo should specialize in the production of

Correct Answer
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Figure 3-1 Panel a) Panel b) -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

Correct Answer
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Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile has an absolute advantage in the production of

Correct Answer
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If labor in Mexico is less productive than labor in the United States in all areas of production,

Correct Answer
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Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one towel?

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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. Maya 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. The opportunity cost of 1 bowl for Bintu is

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

Table 3-31 -Refer to Table 3-31. Relative to the rancher, the farmer has a comparative advantage in the production of

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Table 3-22 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-22. Suppose Zimbabwe decides to increase its production of toothbrushes by 10. What is the opportunity cost of this decision?

Correct AnswerverifiedShow Answer

The most obvious benefit of specialization and trade is that they allow us to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-29 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. -Refer to Table 3-29. Shantala has an absolute advantage in

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Table 3-24 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-24. The opportunity cost of 1 unit of cheese for Spain is

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Define comparative advantage.

Correct AnswerverifiedComparative advantage means a ...View AnswerShow Answer

An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier.

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Table 3-34 Assume that Indonesia and India can switch between producing rice and bananas at a constant rate. -Refer to Table 3-34. India's opportunity cost of producing rice is

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Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo should specialize in the production of

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Figure 3-1 Panel a) Panel b) -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

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Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile has an absolute advantage in the production of

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Correct AnswerverifiedShow Answer

If labor in Mexico is less productive than labor in the United States in all areas of production,

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Correct AnswerverifiedShow Answer

Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one towel?

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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. Maya has an absolute advantage in the production of

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Correct AnswerverifiedShow Answer

Figure 3-18 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-18. The opportunity cost of 1 bowl for Bintu is

Correct AnswerverifiedShow Answer

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Comparative advantage means a ...
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