Question 1

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 Azerbaijan then consume, assuming Uzbekistan specializes in making bolts and Azerbaijan specializes in making nails?

Accepted Answer

A)   8 bolts and 56 nails
B)   14 bolts and 44 nails
C)   18 bolts and 32 nails
D)   20 bolts and 26 nailsE) All of the above
F) B) and C)

Question 2

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 Huang is

Accepted Answer

A)   1/3 parasol.
B)   1/2 parasol.
C)   3 parasols.
D)   4 parasols.E) A) and B)
F) A) and C)

Question 3

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

Accepted Answer

A)   coffee and import soybeans.
B)   soybeans and import coffee.
C)   both goods and import neither good.
D)   neither good and import both goods.E) C) and D)
F) None of the above

Question 4

Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.
 
-Refer to Table 3-11. Varick has an absolute advantage in the production of

Accepted Answer

A)   wheat.
B)   cloth.
C)   both goods.
D)   neither good.E) A) and B)
F) A) and C)

Question 5

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 Zardia's opportunity cost of producing one pound of beef?

Accepted Answer

A)   2/3 bushel of wheat
B)   3/4 bushel of wheat
C)   5/6 bushel of wheat
D)   3/2 bushels of wheatE) C) and D)
F) B) and C)

Question 6

Table 3-18
Chris and Tony's Production Opportunities
 
-Trade between countries

Accepted Answer

A)   allows each country to consume at a point outside its production possibilities frontier.
B)   limits a country's ability to produce goods and services on its own.
C)   must benefit both countries equally; otherwise, trade is not mutually beneficial.
D)   can best be understood by examining the countries' absolute advantages.E) A) and B)
F) All of the above

Question 7

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. Which of the following combinations of mixers and toasters could Miguel not produce in 90 hours?

Accepted Answer

A)   0 mixers and 4 toasters.
B)   1 mixer and 3 toasters.
C)   0.75 mixers and 2.5 toasters.
D)   2 mixers and 0 toasters.E) All of the above
F) B) and C)

Question 8

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. Barb has an absolute advantage in

Accepted Answer

A)   both setting up and testing computers and a comparative advantage in setting up computers.
B)   both setting up and testing computers and a comparative advantage in testing computers.
C)   neither setting up nor testing computers and a comparative advantage in setting up computers.
D)   neither setting up nor testing computers and a comparative advantage in testing computers.E) None of the above
F) A) and B)

Question 9

Figure 3-3
   
-Refer to Figure 3-3. If Arturo and Dina both spend all of their time producing tacos, then total production is

Accepted Answer

A)   400 tacos and 0 burritos.
B)   400 tacos and 250 burritos.
C)   800 tacos and 0 burritos.
D)   800 tacos and 500 burritos.E) All of the above
F) B) and C)

Question 10

Figure 3-5
   
-Refer to Figure 3-5. If the production possibilities frontier shown for Merve is for 8 hours of work, then how long does it take Merve to make one purse?

Accepted Answer

A)   1/2 hour
B)   2 hours
C)   4 hours
D)   8 hoursE) A) and B)
F) B) and D)

Question 11

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. Assume that Maya and Miguel each has 40 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is

Accepted Answer

A)   2 mixer and 8 toasters.
B)   3.5 mixers and 6 toasters.
C)   5 mixers and 4 toasters.
D)   7 mixers and 12 toasters.E) A) and C)
F) C) and D)

Question 12

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...

Question 13

Figure 3-2
Peru's Production Possibilities Frontier
 
-Refer to Figure 3-2. Suppose Madagascar is willing to trade 40 rubies to Peru for each emerald that Peru produces and sends to Madagascar. Which of the following combinations of emeralds and rubies could Peru then consume, assuming Peru specializes in emerald production?

Accepted Answer

A)   2 emeralds and 240 rubies
B)   3 emeralds and 220 rubies
C)   4 emeralds and 200 rubies
D)   5 emeralds and 140 rubiesE) All of the above
F) None of the above

Question 14

When can two countries gain from trading two goods?

Accepted Answer

A)   when the first country can only produce the first good and the second country can only produce the second good
B)   when the first country can produce both goods, but can only produce the second good at great cost, and the second country can produce both goods, but can only produce the first good at great cost
C)   when the first country is better at producing both goods and the second country is worse at producing both goods
D)   Two countries could gain from trading two goods under all of the above conditions.E) None of the above
F) B) and D)

Question 15

Table 3-12
 
-Refer to Table 3-12. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Accepted Answer

A)   1 pound of meat and 7 pounds of potatoes.
B)   2 pounds of meat and 5 pounds of potatoes.
C)   3 pounds of meat and 3 pounds of potatoes.
D)   4 pounds of meat and 2 pounds of potatoes.E) None of the above
F) B) and D)

Question 16

Figure 3-4
   
-Refer to Figure 3-4. Jordan should specialize in the production of

Accepted Answer

A)   novels.
B)   poems.
C)   both goods.
D)   neither good.E) A) and B)
F) A) and C)

Question 17

When each person specializes in producing the good in which he or she has a comparative advantage, each person can gain from trade but total production in the economy is unchanged.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

Trade can make everybody better off because it

Accepted Answer

A)   increases cooperation among nations.
B)   allows people to specialize according to comparative advantage.
C)   requires some workers in an economy to be retrained.
D)   reduces competition among domestic companies.E) C) and D)
F) None of the above

Question 20

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. Min has an absolute advantage in the production of

Accepted Answer

A)   plates and a comparative advantage in the production of plates.
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) A) and B)
F) C) and D)

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 Zardia's opportunity cost of producing one pound of beef?

Correct Answer
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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. Barb has an absolute advantage in

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. The opportunity cost of 1 plate for Huang is

Correct Answer
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Figure 3-5 -Refer to Figure 3-5. If the production possibilities frontier shown for Merve is for 8 hours of work, then how long does it take Merve to make one purse?

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

Correct Answer
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Figure 3-3 -Refer to Figure 3-3. If Arturo and Dina both spend all of their time producing tacos, then total production is

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
verified
Since Julia's opportunity cost...
View 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. Which of the following combinations of mixers and toasters could Miguel not produce in 90 hours?

Correct Answer
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Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11. Varick has an absolute advantage in the production of

Correct Answer
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Table 3-18 Chris and Tony's Production Opportunities -Trade between countries

Correct Answer
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When each person specializes in producing the good in which he or she has a comparative advantage, each person can gain from trade but total production in the economy is unchanged.

Correct Answer
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Correct Answer
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Figure 3-4 -Refer to Figure 3-4. Jordan should specialize 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. Min has an absolute advantage in the production of

Correct Answer
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Trade can make everybody better off because it

Correct Answer
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When can two countries gain from trading two goods?

Correct Answer
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Figure 3-8 -Refer to Figure 3-8. Colombia should specialize in the production of

Correct Answer
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Table 3-12 -Refer to Table 3-12. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Correct Answer
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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 Zardia's opportunity cost of producing one pound of beef?

Correct AnswerverifiedShow Answer

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. Barb has an absolute advantage in

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. The opportunity cost of 1 plate for Huang is

Correct AnswerverifiedShow Answer

Figure 3-5 -Refer to Figure 3-5. If the production possibilities frontier shown for Merve is for 8 hours of work, then how long does it take Merve to make one purse?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 3-3 -Refer to Figure 3-3. If Arturo and Dina both spend all of their time producing tacos, then total production is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6. Which of the following combinations of mixers and toasters could Miguel not produce in 90 hours?

Correct AnswerverifiedShow Answer

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. -Refer to Table 3-11. Varick has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Table 3-18 Chris and Tony's Production Opportunities -Trade between countries

Correct AnswerverifiedShow Answer

When each person specializes in producing the good in which he or she has a comparative advantage, each person can gain from trade but total production in the economy is unchanged.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4. Jordan should specialize 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. Min has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Trade can make everybody better off because it

Correct AnswerverifiedShow Answer

When can two countries gain from trading two goods?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 3-12 -Refer to Table 3-12. Which of the following combinations of meat and potatoes could the farmer produce in 40 hours?

Correct AnswerverifiedShow Answer

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Since Julia's opportunity cost...
View Answer

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