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Exam 2: Specializationand Exchange

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Question 71

Multiple Choice

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Suppose England has a comparative advantage over the United States at producing tea. If this is true, then:

A) England should produce more tea than it wants and sell the rest to the United States.
B) England should produce a small amount of tea and buy the rest of the tea it wants from the United States.
C) England should buy all of the tea it wants from the United States.
D) the United States has nothing to gain from buying tea produced by England.

E) A) and B)
F) None of the above

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Question 72

Multiple Choice

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Consider the production possibilities frontier displayed in the figure shown. If this society chooses to produce 15 watermelons, it can produce no more than:

A) 400 bushels of apples.
B) 300 bushels of apples.
C) 200 bushels of apples.
D) 100 bushels of apples.

E) B) and D)
F) A) and D)

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Question 73

Multiple Choice

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Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. The opportunity cost of building one table is _____ for Tom and _____ for Jerry. Therefore, Tom should specialize in _____.

Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. What are two possible consumption bundles that Country A could produce?

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Tom divides his time evenly between activities and acts efficiently, he will produce:

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increases to 600. Country B now has:

Consider the production possibilities frontier displayed in the figure shown. The fact that the line slopes downward displays which economic concept?

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we can infer that Country A should specialize in producing _____ and be willing to _____ five cars for each truck.

When a producer is operating efficiently, it is producing:

When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:

If France is capable of producing cheese, wine, or some combination of those two, it should:

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. For Jerry, the opportunity cost of building a table is _____ chairs made.

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. What are their respective opportunity costs of one pair of gloves?

The concepts of comparative advantage, specialization, and trade form a compelling argument in favor of:

Suppose that a worker in Country A can make either 15 cars or 5 computers each year. Country A has 1,000 workers. Suppose a worker in Country B can make either 4 cars or 20 computers each year. Country B has 600 workers. _____ has a comparative advantage at producing cars, and _____ has a comparative advantage at producing computers.

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of one avocado is:

Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to give 3 TVs to Country A for every cellphone it receives. Assuming Country A fully specializes in cellphone production, which of the following combinations of goods could Country A now consume that it could not achieve before trade?

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering the production possibilities frontiers of both countries, we know that both would be willing to agree to which terms of trade?

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Suppose Country B's population of workers increased to 600. Which of the following statements is now true?

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Which of the following is a bundle of goods that Country B could potentially make?