Question 1

If the U.S.could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor,would it necessarily follow that the U.S.should specialize in television production?
Explain your answer using the concepts of comparative and or absolute advantage.

Accepted Answer

The answer of If the U.S.could produce 5 televisions per...

Question 2

Tom's opportunity cost of mowing a lawn is 2 loads of laundry.Jen's opportunity cost of mowing a lawn is 1.5 loads of laundry.What is the range of prices for mowing a lawn at which Tom and Jen could both benefit from trade?

Accepted Answer

The answer of Tom's opportunity cost of mowing a lawn...

Question 3

Scenario 3-2
In country A a worker who works 40 hours can produce 200 pounds of rice or 100 pounds of broccoli.In country B a worker who works 40 hours can produce 160 pounds of rice or 120 pounds of broccoli.
-Refer to Scenario 3-2.Give a range of prices in terms of pounds of rice per pound of broccoli at which the two countries would be both be willing to trade.

Accepted Answer

The answer of Scenario 3-2
In country A a worker who...

Question 4

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.Who has a comparative advantage in making muffins?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 5

Explain the difference between absolute advantage and comparative advantage.Which is more important in determining trade patterns,absolute advantage or comparative advantage? Why?

Accepted Answer

The answer of Explain the difference between absolute advantage and...

Question 6

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.Who has a comparative advantage in making cookies?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 7

Country A and country B both produce shirts and shorts.Country B has an absolute advantage producing both shirts and shorts.Is there any condition under which the two countries could gain from trade?

Accepted Answer

The answer of Country A and country B both produce...

Question 8

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.What is Mary's opportunity cost of one cookie?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 9

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.If Mary and Kate trade foods with each other,who will trade away muffins in exchange for cookies?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 10

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.What is Kate's opportunity cost of one cookie?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 11

The gains from specialization and trade are based on ------ advantage.

Accepted Answer

The answer of The gains from specialization and trade are...

Question 12

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas.With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas.Can Elmer and Bugs gain from trade? Defend your answer.

Accepted Answer

The answer of With eight hours of work Elmer can...

Question 13

It takes Heather 1 hour to change the oil in the car and 20 minutes to do the dishes.It takes Zach 1.5 hours to change the oil in the car.For Zach to have a comparative advantage changing the oil it must take him more than ------ minutes to do the dishes.

Accepted Answer

The answer of It takes Heather 1 hour to change...

Question 14

Economists use the term ------ to refer to the ability to produce a good at a lower opportunity cost than another producer.

Accepted Answer

The answer of Economists use the term ------ to refer...

Question 15

Economists use the term ------ to refer to the ability to produce a good using fewer inputs than another producer.

Accepted Answer

The answer of Economists use the term ------ to refer...

Question 16

Sally can make 8 cups of soup per hour or 20 crackers per hour.Harry can make 10 cups of soup per hour or 30 crackers per hour.Can Sally and Harry gain from trade? If so,what is the range of prices of crackers for soup at which they would both find trade advantageous?

Accepted Answer

The answer of Sally can make 8 cups of soup...

Question 17

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.What is Kate's opportunity cost of one muffin?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Question 18

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

The answer of Julia can fix a meal in 1...

Question 19

The only two countries in the world,Alpha and Omega,face the following production possibilities frontiers.

a.Assume that each country decides to use half of its resources in the production of each good.Show these points on the graphs for each country as point A.
b.If these countries choose not to trade,what would be the total world production of popcorn and peanuts?
c.Now suppose that each country decides to specialize in the good in which each has a comparative advantage.By specializing,what is the total world production of each product now?
d.If each country decides to trade 100 units of popcorn for 100 units of peanuts,show on the graphs the gain each country would receive from trade.Label these points B.

Accepted Answer

The answer of The only two countries in the world,Alpha...

Question 20

Figure 3-26
Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier  
-Refer to Figure 3-26.What is Mary's opportunity cost of one muffin?

Accepted Answer

The answer of Figure 3-26
Mary's Production Possibilities Frontier Kate's Production...

Quiz 3: Interdependence and the Gains From Trade: Part A

If the U.S.could produce 5 televisions per hour of labor and China could produce 3 televisions per hour of labor,would it necessarily follow that the U.S.should specialize in television production? Explain your answer using the concepts of comparative and or absolute advantage.

Tom's opportunity cost of mowing a lawn is 2 loads of laundry.Jen's opportunity cost of mowing a lawn is 1.5 loads of laundry.What is the range of prices for mowing a lawn at which Tom and Jen could both benefit from trade?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.Who has a comparative advantage in making muffins?

Explain the difference between absolute advantage and comparative advantage.Which is more important in determining trade patterns,absolute advantage or comparative advantage? Why?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.Who has a comparative advantage in making cookies?

Country A and country B both produce shirts and shorts.Country B has an absolute advantage producing both shirts and shorts.Is there any condition under which the two countries could gain from trade?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.What is Mary's opportunity cost of one cookie?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.If Mary and Kate trade foods with each other,who will trade away muffins in exchange for cookies?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.What is Kate's opportunity cost of one cookie?

The gains from specialization and trade are based on ------ advantage.

With eight hours of work Elmer can produce 20 pounds of carrots or 15 pounds of peas.With eight hours Bugs can produce 10 pounds of carrots or 7.5 pounds of peas.Can Elmer and Bugs gain from trade? Defend your answer.

It takes Heather 1 hour to change the oil in the car and 20 minutes to do the dishes.It takes Zach 1.5 hours to change the oil in the car.For Zach to have a comparative advantage changing the oil it must take him more than ------ minutes to do the dishes.

Economists use the term ------ to refer to the ability to produce a good at a lower opportunity cost than another producer.

Economists use the term ------ to refer to the ability to produce a good using fewer inputs than another producer.

Sally can make 8 cups of soup per hour or 20 crackers per hour.Harry can make 10 cups of soup per hour or 30 crackers per hour.Can Sally and Harry gain from trade? If so,what is the range of prices of crackers for soup at which they would both find trade advantageous?

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.What is Kate's opportunity cost of one muffin?

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.

Figure 3-26 Mary's Production Possibilities Frontier Kate's Production Possibilities Frontier -Refer to Figure 3-26.What is Mary's opportunity cost of one muffin?