Question 1

Production possibilities frontiers cannot be used to illustrate tradeoffs.

Accepted Answer

A) True 
 B)False

Question 2

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. In the nation of Cropitia, the opportunity cost of a pound of ham is 0.3 pounds of cheese. Bonovia and Cropitia both can gain from trading with one another if one pound of ham trades for

Accepted Answer

A)   0.40 pounds of cheese.
B)   0.55 pounds of cheese.
C)   0.75 pounds of cheese.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 3

Tom Brady should probably not mow his own lawn because

Accepted Answer

A)   his opportunity cost of mowing his lawn is higher than the cost of paying someone to mow it for him.
B)   he has a comparative advantage in mowing his lawn relative to a landscaping service.
C)   he has an absolute advantage in mowing his lawn relative to a landscaping service.
D)   he might sprain his ankle.E) B) and C)
F) None of the above

Question 4

Table 3-41 
-Refer to Table 3-41. Which country has an absolute advantage in producing radios?

Accepted Answer

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

Question 5

Table 3-8
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. 
-Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours?

Accepted Answer

A)   5 units of cheese and 3 units of bread.
B)   6 units of cheese and 4 units of bread.
C)   8 units of cheese and 3 units of bread.
D)   7 units of cheese and 2 units of bread.E) B) and C)
F) C) and D)

Question 6

Figure 3-17
Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier 
-Refer to Figure 3-17. Daisy has an absolute advantage in the production of

Accepted Answer

A)   both goods and a comparative advantage in the production of pies.
B)   both goods and a comparative advantage in the production of tarts.
C)   neither good and a comparative advantage in the production of pies.
D)   neither good and a comparative advantage in the production of tarts.E) A) and B)
F) None of the above

Question 7

Figure 3-8
Chile's Production Possibilities Frontier Colombia's Production Possibilities Frontier 
-Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

Accepted Answer

A)   4 pounds of coffee and 16 pounds of soybeans
B)   8 pounds of coffee and 15 pounds of soybeans
C)   16 pounds of coffee and 10 pounds of soybeans
D)   24 pounds of coffee and 4 pounds of soybeansE) B) and C)
F) None of the above

Question 8

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions per year will be

Accepted Answer

A)   100 radios, 300 televisions in Radioland and 300 radios, 100 televisions in Teeveeland.
B)   300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.
C)   200 radios, 100 televisions in Radioland and 100 radios, 200 televisions in Teeveeland.
D)   300 radios, 100 televisions in Radioland and 100 radios, 400 televisions in Teeveeland.E) B) and D)
F) All of the above

Question 9

Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

Accepted Answer

A)   Belarus should export linen to Russia.
B)   Russia should export linen to Belarus.
C)   trading linen would provide no net advantage to either country.
D)   Without additional information about opportunity costs, this question cannot be answered.E) C) and D)
F) None of the above

Question 10

When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all

Accepted Answer

A)   rely upon the government to provide us with the basic necessities of life.
B)   rely upon one another for the goods and services we consume.
C)   have similar tastes and abilities.
D)   are concerned about one another's well­being.E) A) and D)
F) None of the above

Question 11

Differences in opportunity cost allow for gains from trade.

Accepted Answer

A) True 
 B)False

Question 12

Table 3-21
Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. 
-Refer to Table 3-21. Jamaica and Norway would not be able to gain from trade if Norway's opportunity cost of one radio changed to

Accepted Answer

A)   0 coolers.
B)   1 cooler.
C)   2 coolers.
D)   Jamaica and Norway can always gain from trade regardless of their opportunity costs.E) None of the above
F) A) and B)

Question 13

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. England should specialize in the production of

Accepted Answer

A)   cheese and Spain should specialize in the production of bread.
B)   bread and Spain should specialize in the production of cheese.
C)   both goods and Spain should specialize in the production of neither good.
D)   neither good and Spain should specialize in the production of both goods.E) A) and B)
F) All of the above

Question 14

Figure 3-15
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier 
-Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

Accepted Answer

A)   Perry and Jordan will both gain from this trade.
B)   Perry will gain from this trade, but Jordan will not.
C)   Jordan will gain from this trade, but Perry will not.
D)   neither Perry nor Jordan will gain from this trade.E) All of the above
F) B) and C)

Question 15

Figure 3-18
Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier 
-Refer to Figure 3-18. If Bintu and Juba switch from each person dividing her time equally between the production of cups and bowls to each person spending all of her time producing the good in which she has a comparative advantage, then total production will increase by

Accepted Answer

A)   1 bowl and 1 cup.
B)   2 bowls and 4 cups.
C)   3 bowls and 5 cups.
D)   4 bowls and 8 cups.E) None of the above
F) A) and D)

Question 16

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) A) and B)

Question 17

Figure 3-4
Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier 
-Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

Accepted Answer

A)   2 sweaters and 8 jackets.
B)   3 sweaters and 13 jackets.
C)   5 sweaters and 8 jackets.
D)   6 sweaters and 26 jackets.E) B) and D)
F) All of the above

Question 18

Table 3-10
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. 
-Refer to Table 3-10. We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea. If we were to do this, measuring airplanes along the horizontal axis, then

Accepted Answer

A)   the slope of Japan's production possibilities frontier would be ­5 and the slope of Korea's production possibilities frontier would be -3.
B)   the slope of Japan's production possibilities frontier would be ­0.2 and the slope of Korea's production possibilities frontier would be -0.33.
C)   the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
D)   the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.E) A) and C)
F) None of the above

Question 19

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 Min is

Accepted Answer

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

Question 20

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

Accepted Answer

A) True 
 B)False

Exam 3: Interdependence and the Gains From Trade

Correct Answer
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Correct Answer
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Tom Brady should probably not mow his own lawn because

Correct Answer
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Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

Correct Answer
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Differences in opportunity cost allow for gains from trade.

Correct Answer
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Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing radios?

Correct Answer
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Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours?

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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Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

Correct Answer
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Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

Correct Answer
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When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all

Correct Answer
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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 Min is

Correct Answer
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Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

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. England should specialize in the production of

Correct Answer
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Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Daisy has an absolute advantage in the production of

Correct Answer
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Production possibilities frontiers cannot be used to illustrate tradeoffs.

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

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Correct AnswerverifiedShow Answer

Tom Brady should probably not mow his own lawn because

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Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of cloth. Dewey's opportunity cost of producing one bushel of corn is 1/2 yard of cloth.

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Differences in opportunity cost allow for gains from trade.

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Table 3-41 -Refer to Table 3-41. Which country has an absolute advantage in producing radios?

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Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. Which of the following combinations of cheese and bread could England not produce in 24 hours?

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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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Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

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Figure 3-4 Lisa's Production Possibilities Frontier Bryce's Production Possibilities Frontier -Refer to Figure 3-4. If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters, then total production is

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When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all

Correct AnswerverifiedShow Answer

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 Min is

Correct AnswerverifiedShow Answer

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. If Perry and Jordan each spends all of his/her time producing the good in which s/he has a comparative advantage and trade takes place at a price of 1 novel for 7 poems, then

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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. England should specialize in the production of

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Figure 3-17 Maxine's Production Possibilities Frontier Daisy's Production Possibilities Frontier -Refer to Figure 3-17. Daisy has an absolute advantage in the production of

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Production possibilities frontiers cannot be used to illustrate tradeoffs.

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