Question 1

Some countries win in international trade,while other countries lose.

Accepted Answer

A) True 
 B)False

Question 2

Figure 3-2
Peru's Production Possibilities Frontier 
-Refer to Figure 3-2.If the production possibilities frontier shown is for one month of production,then which of the following combinations of emeralds and rubies could Peru not produce in a given month?

Accepted Answer

A)   6 emeralds and 60 rubies
B)   4 emeralds and 120 rubies
C)   3 emeralds and 160 rubies
D)   1 emeralds and 210 rubiesE) A) and D)
F) A) and B)

Question 3

Assume for Namibia that the opportunity cost of each hut is 200 bowls.Then which of these pairs of points could be on Namibia's production possibilities frontier?

Accepted Answer

A)   (200 huts,30,000 bowls) and (150 huts,35,000 bowls) 
B)   (200 huts,40,000 bowls) and (150 huts,30,000 bowls) 
C)   (300 huts,50,000 bowl) and (200 huts,60,000 bowls) 
D)   (300 huts,60,000 bowls) and (200 huts,80,000 bowls) E) All of the above
F) A) and B)

Question 4

Which of the following statements about comparative advantage is not true?

Accepted Answer

A)   Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.
B)   The principle of comparative advantage applies to countries as well as to individuals.
C)   Economists use the principle of comparative advantage to emphasize the potential benefits of free trade.
D)   A country may have a comparative advantage in producing a good,even though it lacks an absolute advantage in producing that good.E) C) and D)
F) B) and D)

Question 5

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-3.Zimbabwe has an absolute advantage in the production of

Accepted Answer

A)   toothbrushes and a comparative advantage in the production of toothbrushes.
B)   toothbrushes and a comparative advantage in the production of hairbrushes.
C)   hairbrushes and a comparative advantage in the production of toothbrushes.
D)   hairbrushes and a comparative advantage in the production of hairbrushes.E) A) and B)
F) C) and D)

Question 6

People who provide you with goods and services

Accepted Answer

A)   are acting out of generosity.
B)   do so because they get something in return.
C)   have chosen not to become interdependent.
D)   are required to do so by the government.E) All of the above
F) B) and C)

Question 7

Table 3-1
Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate.
 
-Refer to Table 3-1.At which of the following prices would both Sardi and Tinaka gain from trade with each other?

Accepted Answer

A)   6 bushels of corn for 10.5 pounds of pork
B)   12 bushels of corn for 19 pounds of pork
C)   24 bushels of corn for 34 pounds of pork
D)   Sardi and Tinaka could not both gain from trade with each other at any price.E) A) and B)
F) B) and D)

Question 8

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Accepted Answer

A) True 
 B)False

Question 9

Figure 3-7
Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier  
-Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together make in a given 4-hour production period?

Accepted Answer

A)   1 bowl and 14 cups
B)   2 bowls and 11 cups
C)   3 bowls and 10 cups
D)   5 bowls and 5 cupsE) A) and C)
F) B) and D)

Question 10

Figure 3-7
Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier  
-Refer to Figure 3-7.The opportunity cost of 1 cup for Juba is

Accepted Answer

A)   1/6 bowl.
B)   2/3 bowl.
C)   3/2 bowls.
D)   6 bowls.E) A) and C)
F) A) and B)

Question 11

Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier  
-Refer to Figure 3-3.Which of the following is not correct?

Accepted Answer

A)   Bob and Enid could each consume 100 tacos and 100 burritos without trade.
B)   Neither Bob nor Enid could each consume 200 tacos and 200 burritos without trade.
C)   Bob and Enid could each consume 200 tacos and 200 burritos with trade.
D)   Total consumption of burritos could not be 600 either with or without trade.E) A) and C)
F) B) and C)

Question 12

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.Falda has an absolute advantage in the production of

Accepted Answer

A)   wheat.
B)   cloth.
C)   both goods.
D)   neither good.E) All of the above
F) A) and C)

Question 13

Figure 3-8
Belgium's Production Possibilities Frontier Latvia'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 waffles and pancakes could Belgium and Latvia together not make in a given day?

Accepted Answer

A)   4 waffles and 17 pancakes
B)   8 waffles and 14 pancakes
C)   16 waffles and 9 pancakes
D)   24 waffles and 3 pancakesE) A) and B)
F) B) and D)

Question 14

Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier  
-Refer to Figure 3-3.If Bob and Enid 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) A) and C)

Question 15

Figure 3-9
Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier  
-Refer to Figure 3-9.Uzbekistan has an absolute advantage in the production of

Accepted Answer

A)   bolts and a comparative advantage in the production of bolts.
B)   bolts and a comparative advantage in the production of nails.
C)   nails and a comparative advantage in the production of bolts.
D)   nails and a comparative advantage in the production of nails.E) A) and C)
F) All of the above

Question 16

Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.
 
-Refer to Table 3-6.Hilda has an absolute advantage in the production of

Accepted Answer

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

Question 17

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
 
-Refer to Table 3-5.The opportunity cost of 1 unit of bread for England is

Accepted Answer

A)   1/4 unit of cheese.
B)   1/4 hour of labor.
C)   4 units of cheese.
D)   4 hours of labor.E) A) and C)
F) A) and B)

Question 18

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

Accepted Answer

A)   if he devotes all of his available resources to watermelon production,then he can produce 80 watermelons.
B)   he cannot have a comparative advantage over other farmers in producing cantaloupes.
C)   his opportunity cost of one watermelon is 2/3 of a cantaloupe.
D)   his production possibilities frontier is bowed-out.E) None of the above
F) All of the above

Question 19

Figure 3-4
Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier  
-Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is

Accepted Answer

A)   2 novels and 6 poems.
B)   3 novels and 12 poems.
C)   4 novels and 12 poems.
D)   6 novels and 24 poems.E) A) and B)
F) B) and D)

Question 20

Table 3-3
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
 
-Refer to Table 3-3.Assume that Zimbabwe and Portugal each has 180 machine minutes available.If each country divides its time equally between the production of toothbrushes and hairbrushes,then total production is

Accepted Answer

A)   24 toothbrushes and 12 hairbrushes.
B)   48 toothbrushes and 24 hairbrushes.
C)   96 toothbrushes and 48 hairbrushes.
D)   720 toothbrushes and 1440 hairbrushes.E) B) and C)
F) A) and D)

Exam 3: Interdependence and the Gains From Trade

Which of the following statements about comparative advantage is not true?

Correct Answer
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Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for one month of production,then which of the following combinations of emeralds and rubies could Peru not produce in a given month?

Correct Answer
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Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.Which of the following is not correct?

Correct Answer
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Table 3-1 Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate. -Refer to Table 3-1.At which of the following prices would both Sardi and Tinaka gain from trade with each other?

Correct Answer
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Some countries win in international trade,while other countries lose.

Correct Answer
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Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.The opportunity cost of 1 cup for Juba is

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.Falda has an absolute advantage in the production of

Correct Answer
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Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.If Bob and Enid both spend all of their time producing tacos,then total production is

Correct Answer
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People who provide you with goods and services

Correct Answer
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Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is

Correct Answer
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Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.Hilda has an absolute advantage in the production of

Correct Answer
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Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.The opportunity cost of 1 unit of bread for England is

Correct Answer
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Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.Uzbekistan has an absolute advantage in the production of

Correct Answer
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If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

Correct Answer
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Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Zimbabwe has an absolute advantage in the production of

Correct Answer
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Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct Answer
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Assume for Namibia that the opportunity cost of each hut is 200 bowls.Then which of these pairs of points could be on Namibia's production possibilities frontier?

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

Which of the following statements about comparative advantage is not true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-2 Peru's Production Possibilities Frontier -Refer to Figure 3-2.If the production possibilities frontier shown is for one month of production,then which of the following combinations of emeralds and rubies could Peru not produce in a given month?

Correct AnswerverifiedShow Answer

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.Which of the following is not correct?

Correct AnswerverifiedShow Answer

Table 3-1 Assume that Sardi and Tinaka can switch between producing corn and producing pork at a constant rate. -Refer to Table 3-1.At which of the following prices would both Sardi and Tinaka gain from trade with each other?

Correct AnswerverifiedShow Answer

Some countries win in international trade,while other countries lose.

Correct AnswerverifiedShow Answer

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier -Refer to Figure 3-7.The opportunity cost of 1 cup for Juba is

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.Falda has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier -Refer to Figure 3-3.If Bob and Enid both spend all of their time producing tacos,then total production is

Correct AnswerverifiedShow Answer

People who provide you with goods and services

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Figure 3-4 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is

Correct AnswerverifiedShow Answer

Table 3-6 Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate. -Refer to Table 3-6.Hilda has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-5.The opportunity cost of 1 unit of bread for England is

Correct AnswerverifiedShow Answer

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier -Refer to Figure 3-9.Uzbekistan has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

Correct AnswerverifiedShow Answer

Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. -Refer to Table 3-3.Zimbabwe has an absolute advantage in the production of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Adam Smith was the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct AnswerverifiedShow Answer

Assume for Namibia that the opportunity cost of each hut is 200 bowls.Then which of these pairs of points could be on Namibia's production possibilities frontier?

Correct AnswerverifiedShow Answer

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