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Exam 3: Interdependence and the Gains From Trade

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Question 251

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Opportunity cost measures the trade-off between two goods that each producer faces.

A) True
B) False

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Question 252

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Use the following Figure to answer the question : Figure 3-14 Arturo's Production Possibilities Frontier Dina's Production Possibilities Frontier -Refer to Figure 3-14. Arturo's opportunity cost of one burrito is

A) 3/4 taco and Dina's opportunity cost of one burrito is 1/2 taco.
B) 3/4 taco and Dina's opportunity cost of one burrito is 2 tacos.
C) 4/3 tacos and Dina's opportunity cost of one burrito is 1/2 taco.
D) 4/3 tacos and Dina's opportunity cost of one burrito is 2 tacos.

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

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Question 253

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Use the following Figure to answer the question :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?

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.

Use the following Table to answer the question : Table 3-23 Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. -Refer to Table 3-23. The opportunity cost of 1 pound of pork for the farmer is

Use the following Table to answer the question : 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. The opportunity cost of 1 plate for Huang is

Use the following Figure to answer the question : Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. The opportunity cost of 1 poem for Jordan is

Use the following Table to answer the question : 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. Miguel has an absolute advantage in the production of

Under what conditions is an economy's production possibilities frontier also its consumption possibilities frontier?

For a self-sufficient producer, the production possibilities frontier

Use the following Table to answer the question : Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. Brad has an absolute advantage in the production of

Interdependence among individuals and interdependence among nations are both based on the gains from trade.

Use the following Table to answer the question : 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. Min has an absolute advantage in the production of

Use the following Table to answer the question : Table 3-20 Assume that Brad and Theresa can switch between producing wheat and producing beef at a constant rate. -Refer to Table 3-20. What is Brad's opportunity cost of producing one pound of beef?

As a student, Anne spends 40 hours per week writing term papers and completing homework assignments. On one axis of her production possibilities frontier is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. Anne's production possibilities frontier is a straight line if

Adam Smith wrote that a person should never attempt to make at home what it will cost him more to make than to buy.

Use the following Figure to answer the question : Figure 3-19 Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier -Refer to Figure 3-19. Chile's opportunity cost of one pound of coffee is

Use the following Table to answer the question : Table 3-12 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 3-12. Which of the following points would not be on Barb's production possibilities frontier, based on a 40-hour week?

It takes Ross 6 hours to produce a bushel of corn and 2 hours to wash and polish a car. It takes Courtney 6 hours to produce a bushel of corn and 1 hour to wash and polish a car. Courtney and Ross cannot gain from specialization and trade, since it takes each of them 6 hours to produce 1 bushel of corn.

Fred trades 2 tomatoes to Barney in exchange for 1 pumpkin. Fred and Barney both gain from the exchange. We can conclude that, for Barney, the opportunity cost of producing 1 pumpkin is greater than 2 tomatoes.