Chapter 3 Practice: Interdependence and Gains from Trade

Frage 1 von 16

1

In an hour, David can wash 2 cars or mow 1 lawn, while Ron can wash 3 cars or mow 1 lawn. Who has the absolute advantage in car washing, and who has the absolute advantage in lawn mowing?

Wähle eine der folgenden:

David in washing, Ron in mowing.
Ron in washing, David in mowing.
David in washing, neither in mowing.
Ron in washing, neither in mowing.

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Frage 2 von 16

1

in an hour, David can wash 2 cars or mow 1 lawn, while Ron can wash 3 cars or mow 1 lawn. Who has the comparative advantage in car washing, and who has the comparative advantage in lawn mowing?

Wähle eine der folgenden:

David in washing, Ron in mowing
Ron in washing, David in mowing
David in washing, neither in mowing.
Ron in washing, neither in mowing.

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Frage 3 von 16

1

When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage,

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they both obtain consumption outside their production possibilities frontier.
they both obtain consumption inside their production possibilities frontier.
one individual consumes inside his production possibilities frontier, while the other consumes outside his.
each individual consumes a point on his own production possibilities frontier.

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Frage 4 von 16

1

Which goods will a nation typically import?

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those goods in which the nation has an absolute advantage
those goods in which the nation has a comparative advantage
those goods in which other nations have an absolute advantage
those goods in which other nations have a comparative advantage

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Frage 5 von 16

1

Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor, while producing a shirt takes 4 hours of labor.
What will these nations trade?

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China will export aircraft, while the United States will export shirts.
China will export shirts, while the United States will export aircraft.
Both nations will export shirts.
There are no gains from trade in this situation.

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Frage 6 von 16

1

Mark can cook dinner in 30 minutes and wash the laundry in 20 minutes. His roommate takes half as long to do each task. How should the roommates allocate the work?

Wähle eine der folgenden:

Mark should do more of the cooking based on his comparative advantage
Mark should do more of the washing based on his comparative advantage.
Mark should do more of the washing based on his absolute advantage.
There are no gains from trade in this situation.

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Frage 7 von 16

1

Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier?

Wähle eine der folgenden:

(300 airplanes, 15,000 cars) and (200 airplanes, 25,000 cars)
(200 airplanes, 5,000 cars) and (150 airplanes, 4,000 cars)
(200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars)
(300 airplanes, 25,000 cars) and (200 airplanes, 40,000 cars)

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Frage 8 von 16

1

Indonesia's opportunity cost of producing bananas is...

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2.5 units of rice. This is lower than India's opportunity cost of producing bananas.
2.5 units of rice. This is higher than India's opportunity cost of producing bananas.
2/5 units of rice. This is lower than India's opportunity cost of producing bananas.
2/5 units of rice. This is higher than India's opportunity cost of producing bananas.

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Frage 9 von 16

1

India's opportunity cost of producing rice is

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2 units of bananas. This is lower than Indonesia's opportunity cost of producing rice.
2 units of bananas. This is higher than Indonesia's opportunity cost of producing rice.
1/2 units of bananas. This is lower than Indonesia's opportunity cost of producing rice.
1/2 units of bananas. This is higher than Indonesia's opportunity cost of producing rice.

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Frage 10 von 16

1

When can two countries gain from trading two goods?

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when the first country can only produce the first good and the second country can only produce the second good
when the first country is better at producing both goods and the second country is worse at producing both goods
when the first country can produce both goods, but can only produce the second good at great cost, and the second country can produce both goods, but can only produce the first good at great cost
Two countries could gain from trading two goods under all of the above conditions

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Frage 11 von 16

1

for which good(s) does Indonesia have a comparative advantage

Wähle eine der folgenden:

rice but not bananas.
rice and bananas.
nether rice nor bananas.
bananas but not rice.

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Frage 12 von 16

1

At which of the following prices, if any, can India and Indonesia both gain from trade?

Wähle eine der folgenden:

1/3 units of bananas per unit of rice
1/5 units of bananas per unit of rice.
3/5 units of bananas per unit of rice
none of the above.

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Frage 13 von 16

1

The opportunity cost of an item is

Wähle eine der folgenden:

always less than the dollar value of the item.
the number of hours that one must work in order to buy one unit of the item.
what you give up to get that item.
always greater than the cost of producing the item.

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Frage 14 von 16

1

Bob has...

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an absolute and comparative advantage producing good x.
a comparative but not an absolute advantage producing good x.
neither a comparative nor an absolute advantage producing good x.
an absolute but not a comparative advantage producing good x.

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Frage 15 von 16

1

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

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has a low opportunity cost of producing that good, relative to the opportunity costs of other producers.
should be the only producer of that good.
has a comparative advantage in the production of that good.
has an absolute advantage in the production of that good.

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Frage 16 von 16

1

If the production possibilities frontier is a straight line, then "?" must be

Wähle eine der folgenden:

200
400
500
300

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Chapter 3

Chapter 3 Practice: Interdependence and Gains from Trade

Frage 1 von 16

In an hour, David can wash 2 cars or mow 1 lawn, while Ron can wash 3 cars or mow 1 lawn. Who has the absolute advantage in car washing, and who has the absolute advantage in lawn mowing?

Wähle eine der folgenden:

Erklärung

Frage 2 von 16

in an hour, David can wash 2 cars or mow 1 lawn, while Ron can wash 3 cars or mow 1 lawn. Who has the comparative advantage in car washing, and who has the comparative advantage in lawn mowing?

Wähle eine der folgenden:

Erklärung

Frage 3 von 16

When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage,

Wähle eine der folgenden:

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Frage 4 von 16

Which goods will a nation typically import?

Wähle eine der folgenden:

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Frage 5 von 16

Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor, while producing a shirt takes 4 hours of labor. What will these nations trade?

Wähle eine der folgenden:

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Frage 6 von 16

Mark can cook dinner in 30 minutes and wash the laundry in 20 minutes. His roommate takes half as long to do each task. How should the roommates allocate the work?

Wähle eine der folgenden:

Erklärung

Frage 7 von 16

Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier?

Wähle eine der folgenden:

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Frage 8 von 16

Indonesia's opportunity cost of producing bananas is...

Wähle eine der folgenden:

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Frage 9 von 16

India's opportunity cost of producing rice is

Wähle eine der folgenden:

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Frage 10 von 16

When can two countries gain from trading two goods?

Wähle eine der folgenden:

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Frage 11 von 16

for which good(s) does Indonesia have a comparative advantage

Wähle eine der folgenden:

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Frage 12 von 16

At which of the following prices, if any, can India and Indonesia both gain from trade?

Wähle eine der folgenden:

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Frage 13 von 16

The opportunity cost of an item is

Wähle eine der folgenden:

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Frage 14 von 16

Bob has...

Wähle eine der folgenden:

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Frage 15 von 16

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

Wähle eine der folgenden:

Erklärung

Frage 16 von 16

If the production possibilities frontier is a straight line, then "?" must be

Wähle eine der folgenden:

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Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor, while producing a shirt takes 4 hours of labor.
What will these nations trade?