Question 1

Table 3-1 
-Refer to Table 3-1.What is the opportunity cost of 1 kg of potatoes for the rancher?

Accepted Answer

A)   4 hours of labour
B)   3 hours of labour
C)   4 / 3 kg of meat
D)   3 / 4kg of meatE) C) and D)
F) B) and D)

Question 2

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.If the two countries do not trade,Cornland will produce and consume 400 bushels of corn and 100 bushels of oats,while Oatland will produce and consume 50 bushels of corn and 500 bushels of oats.Combined output for the two countries would therefore be 450 bushels of corn and 600 bushels of oats.If the two countries do trade,each will completely specialize in producing the crop for which it has a comparative advantage.If trade occurs,by what amount will the combined output for the two countries increase?

Accepted Answer

A)   200 bushels of corn and 200 bushels of oats
B)   350 bushels of corn and 400 bushels of oats
C)   400 bushels of corn and 500 bushels of oats
D)   800 bushels of corn and 1000 bushels of oatsE) B) and C)
F) C) and D)

Question 3

Table 3-1 
-Refer to Table 3-1.What does each producer have a comparative advantage in?

Accepted Answer

A)   The rancher has a comparative advantage in neither good,and the farmer has a comparative advantage in both goods.
B)   The rancher has a comparative advantage in both goods,and the farmer has a comparative advantage in neither good.
C)   The rancher has a comparative advantage in meat,and the farmer has a comparative advantage in potatoes.
D)   The rancher has a comparative advantage in potatoes,and the farmer has a comparative advantage in meat.E) B) and C)
F) A) and D)

Question 4

Figure 3-3
Ice cream and cones are measured in kilograms. 
-Refer to Figure 3-3.What does each of the two producers have a comparative advantage in?

Accepted Answer

A)   Ben has a comparative advantage in cones,and Jerry has a comparative advantage in ice cream.
B)   Ben has a comparative advantage in ice cream,and Jerry has a comparative advantage in cones.
C)   Ben has a comparative advantage in neither good,and Jerry has a comparative advantage in both goods.
D)   Ben has a comparative advantage in both goods,and Jerry has a comparative advantage in neither good.E) A) and B)
F) None of the above

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 3-4  
-Refer to Figure 3-4.What does each of the two producers have a comparative advantage in?

Accepted Answer

A)   Ben has a comparative advantage in beer,and Jerry has a comparative advantage in wine.
B)   Ben has a comparative advantage in wine,and Jerry has a comparative advantage in beer.
C)   Ben has a comparative advantage in neither good,and Jerry has a comparative advantage in wine.
D)   Ben has a comparative advantage in both goods,and Jerry has a comparative advantage in neither.E) A) and B)
F) C) and D)

Question 7

Table 3-2  ​
-Refer to Table 3-2.What does each producer have an absolute advantage in?

Accepted Answer

A)   The farmer has an absolute advantage in meat,and the rancher has an absolute advantage in potatoes.
B)   The farmer has an absolute advantage in neither,and the rancher has an absolute advantage in meat.
C)   The farmer has an absolute advantage in potatoes good,and the rancher has an absolute advantage in both goods.
D)   The farmer has an absolute advantage in potatoes,and the rancher has an absolute advantage in neither good.E) A) and B)
F) A) and C) B

Question 8

Table 3-5  ​
-Refer to Table 3-5.What is the opportunity cost of one car for Canada?

Accepted Answer

A)   1 / 4 airplane
B)   1 / 3 airplane
C)   3 airplanes
D)   4 airplanesE) A) and B)
F) A) and C)

Question 9

Gary and Diane must prepare a presentation for their marketing class.As part of their presentation,they must do a series of calculations and prepare 50 PowerPoint slides.It would take Gary 10 hours to do the required calculations and 10 hours to prepare the slides.It would take Diane 12 hours to do the calculations and 20 hours to prepare the slides.
a.How much time would it take the two to complete the project if they divide the calculations equally and the slides equally?
b.How much time would it take the two to complete the project if they use comparative advantage and specialize in calculating or preparing slides?
c.If Diane and Gary have the same opportunity cost of $5 per hour,is there a better solution than for each to specialize in calculating or preparing slides?

Accepted Answer

a.If both tasks are divided equally,it w...

Question 10

Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. 
-Refer to Figure 3-5.Who has a comparative or absolute advantage in what product?

Accepted Answer

A)   Ginger has an absolute advantage in tap shoes,and Fred has a comparative advantage in ballet slippers.
B)   Ginger has an absolute advantage in both goods,and Fred has a comparative advantage in neither good.
C)   Ginger has an absolute advantage in ballet slippers,and Fred has a comparative advantage in tap shoes.
D)   Ginger has an absolute advantage in neither good,and Fred has a comparative advantage in both goods.E) All of the above
F) B) and D)

Question 11

Figure 3-3
Ice cream and cones are measured in kilograms. 
-Refer to Figure 3-3.Suppose that Ben and Jerry have both decided to produce at point A on their production possibilities frontiers.What can we infer from this information?

Accepted Answer

A)   that this is not an efficient combination for neither Ben nor Jerry
B)   that Ben and Jerry are both allocating 1 / 2 their time to the production of each good
C)   that no other production point is as efficient for both Ben and Jerry to produce as point A
D)   that the two must be trading with each otherE) All of the above
F) A) and C)

Question 12

Figure 3-4  
-Refer to Figure 3-4.What does each of the two producers have an absolute advantage in?

Accepted Answer

A)   Ben has an absolute advantage in wine,and Jerry has an absolute advantage in neither good.
B)   Ben has an absolute advantage in beer,and Jerry has an absolute advantage in wine.
C)   Ben has an absolute advantage in wine,and Jerry has an absolute advantage in beer.
D)   Ben has an absolute advantage in neither good,and Jerry has an absolute advantage in both goods.E) All of the above
F) None of the above

Question 13

Table 3-3  ​
-Refer to Table 3-3.What is the opportunity cost of one blanket for Amy?

Accepted Answer

A)   1 / 4 sweater
B)   1 sweater
C)   4 sweaters
D)   5 sweatersE) B) and C)
F) A) and B)

Question 14

Figure 3-6
These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. 
-Refer to Figure 3-6.Who has a comparative advantage in each product?

Accepted Answer

A)   Barney has a comparative advantage in both goods,and Betty has a comparative advantage in neither good.
B)   Barney has a comparative advantage in loaves of bread,and Betty has a comparative advantage in pies.
C)   Barney has a comparative advantage in neither good,and Betty has a comparative advantage in both goods.
D)   Barney has a comparative advantage in pies,and Betty has a comparative advantage in loaves of bread.E) A) and D)
F) A) and C)

Question 15

Figure 3-1 
-Refer to Figure 3-1.Assume that both Paul and Cliff divide their time equally between the production of corn and wheat,and they do not trade.If they were the only producers of corn and wheat,what would the total production of wheat and corn be?

Accepted Answer

A)   8 bushels of wheat and 7 bushels of corn
B)   7 bushels of wheat and 6 bushels of corn
C)   6 bushels of wheat and 8 bushels of corn
D)   7 bushels of wheat and 7 bushels of cornE) All of the above
F) A) and D) D

Question 16

How is absolute advantage found?

Accepted Answer

A)   by comparing opportunity costs
B)   by calculating the dollar cost of production
C)   by comparing the productivity of one nation to that of another
D)   by first determining which country has a comparative advantageE) All of the above
F) B) and D)

Question 17

Table 3-2  ​
-Refer to Table 3-2.What does each producer have an absolute or comparative advantage in?

Accepted Answer

A)   The rancher has an absolute advantage in both goods,and the farmer has a comparative advantage in meat.
B)   The rancher has an absolute advantage in meat,and the farmer has a comparative advantage in potatoes.
C)   The rancher has an absolute advantage in meat,and the farmer has a comparative advantage in neither good.
D)   The rancher has an absolute advantage in neither good,and the farmer has a comparative advantage in potatoes.E) All of the above
F) C) and D)

Question 18

Suppose it takes a Chinese worker 2 hours to produce a ceramic pot,and 20 hours to produce a tablecloth.Suppose that it takes a Canadian worker 2 hours to produce a ceramic pot and 10 hours to produce a tablecloth.It will benefit China to produce extra pots and export them to Canada in return for imported Canadian tablecloths.

Accepted Answer

A) True 
 B)False

Question 19

Figure 3-4  
-Refer to Figure 3-4.What does each of the two producers have a comparative or absolute advantage in?

Accepted Answer

A)   Ben has an absolute advantage in wine,and Jerry has a comparative advantage in neither good.
B)   Ben has an absolute advantage in both goods,and Jerry has a comparative advantage in beer.
C)   Ben has an absolute advantage in wine,and Jerry has a comparative advantage in beer.
D)   Ben has an absolute advantage in beer,and Jerry has a comparative advantage in wine.E) All of the above
F) B) and C) C

Question 20

Figure 3-3
Ice cream and cones are measured in kilograms. 
-Refer to Figure 3-3.For Jerry,what is the opportunity cost of 1 kg of cones?

Accepted Answer

A)   2 / 3 kg of ice cream
B)   1 kg of ice cream
C)   2 kg of ice cream
D)   3 kg of ice creamE) None of the above
F) A) and B)

Exam 3: Interdependence and the Gains From Trade

Table 3-1 -Refer to Table 3-1.What is the opportunity cost of 1 kg of potatoes for the rancher?

Correct Answer
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Correct Answer
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Table 3-1 -Refer to Table 3-1.What does each producer have a comparative advantage in?

Correct Answer
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Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.What does each of the two producers have a comparative advantage in?

Correct Answer
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Correct Answer
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Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have a comparative advantage in?

Correct Answer
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Table 3-2 -Refer to Table 3-2.What does each producer have an absolute advantage in?

Correct Answer
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B

Table 3-5 -Refer to Table 3-5.What is the opportunity cost of one car for Canada?

Correct Answer
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Correct Answer
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a.If both tasks are divided equally,it w...
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Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5.Who has a comparative or absolute advantage in what product?

Correct Answer
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Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.Suppose that Ben and Jerry have both decided to produce at point A on their production possibilities frontiers.What can we infer from this information?

Correct Answer
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Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have an absolute advantage in?

Correct Answer
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Table 3-3 -Refer to Table 3-3.What is the opportunity cost of one blanket for Amy?

Correct Answer
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Figure 3-6 These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. -Refer to Figure 3-6.Who has a comparative advantage in each product?

Correct Answer
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Figure 3-1 -Refer to Figure 3-1.Assume that both Paul and Cliff divide their time equally between the production of corn and wheat,and they do not trade.If they were the only producers of corn and wheat,what would the total production of wheat and corn be?

Correct Answer
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D

How is absolute advantage found?

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Table 3-2 -Refer to Table 3-2.What does each producer have an absolute or comparative advantage in?

Correct Answer
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Correct Answer
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Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have a comparative or absolute advantage in?

Correct Answer
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C

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.For Jerry,what is the opportunity cost of 1 kg of cones?

Correct Answer
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Exam 3: Interdependence and the Gains From Trade

Table 3-1 -Refer to Table 3-1.What is the opportunity cost of 1 kg of potatoes for the rancher?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 3-1 -Refer to Table 3-1.What does each producer have a comparative advantage in?

Correct AnswerverifiedShow Answer

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.What does each of the two producers have a comparative advantage in?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have a comparative advantage in?

Correct AnswerverifiedShow Answer

Table 3-2 ​ -Refer to Table 3-2.What does each producer have an absolute advantage in?

Correct AnswerverifiedB

Table 3-5 ​ -Refer to Table 3-5.What is the opportunity cost of one car for Canada?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.If both tasks are divided equally,it w...View AnswerShow Answer

Figure 3-5 These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. -Refer to Figure 3-5.Who has a comparative or absolute advantage in what product?

Correct AnswerverifiedShow Answer

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.Suppose that Ben and Jerry have both decided to produce at point A on their production possibilities frontiers.What can we infer from this information?

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have an absolute advantage in?

Correct AnswerverifiedShow Answer

Table 3-3 ​ -Refer to Table 3-3.What is the opportunity cost of one blanket for Amy?

Correct AnswerverifiedShow Answer

Figure 3-6 These figures illustrate the production possibilities available to Barney and Betty with eight hours of labour in their bakery. -Refer to Figure 3-6.Who has a comparative advantage in each product?

Correct AnswerverifiedShow Answer

Figure 3-1 -Refer to Figure 3-1.Assume that both Paul and Cliff divide their time equally between the production of corn and wheat,and they do not trade.If they were the only producers of corn and wheat,what would the total production of wheat and corn be?

Correct AnswerverifiedD

How is absolute advantage found?

Correct AnswerverifiedShow Answer

Table 3-2 ​ -Refer to Table 3-2.What does each producer have an absolute or comparative advantage in?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.What does each of the two producers have a comparative or absolute advantage in?

Correct AnswerverifiedC

Figure 3-3 Ice cream and cones are measured in kilograms. -Refer to Figure 3-3.For Jerry,what is the opportunity cost of 1 kg of cones?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Table 3-2 -Refer to Table 3-2.What does each producer have an absolute advantage in?

Correct Answer
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B

Table 3-5 -Refer to Table 3-5.What is the opportunity cost of one car for Canada?

Correct Answer
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Correct Answer
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a.If both tasks are divided equally,it w...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Table 3-3 -Refer to Table 3-3.What is the opportunity cost of one blanket for Amy?

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Correct Answer
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D

Correct Answer
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Table 3-2 -Refer to Table 3-2.What does each producer have an absolute or comparative advantage in?

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C

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