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Table 3-17 US and French Production Opportunities Table 3-17 US and French Production Opportunities -Refer to Table 3-17 France has an absolute advantage in the production of A) wine. B) cheese. C) both wine and cheese. D) neither wine nor cheese. -Refer to Table 3-17 France has an absolute advantage in the production of


A) wine.
B) cheese.
C) both wine and cheese.
D) neither wine nor cheese.

E) A) and B)
F) A) and C)

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Figure 3-8 Figure 3-8 -Refer to Figure 3-8.At which of the following prices would both Chile and Colombia gain from trade with each other? A) 6 pounds of soybeans for 9 pounds of coffee B) 8 pounds of soybeans for 20 pounds of coffee C) 11 pounds of soybeans for 33 pounds of coffee D) Chile and Colombia could not both gain from trade with each other at any price. Figure 3-8 -Refer to Figure 3-8.At which of the following prices would both Chile and Colombia gain from trade with each other? A) 6 pounds of soybeans for 9 pounds of coffee B) 8 pounds of soybeans for 20 pounds of coffee C) 11 pounds of soybeans for 33 pounds of coffee D) Chile and Colombia could not both gain from trade with each other at any price. Figure 3-8 -Refer to Figure 3-8.At which of the following prices would both Chile and Colombia gain from trade with each other? A) 6 pounds of soybeans for 9 pounds of coffee B) 8 pounds of soybeans for 20 pounds of coffee C) 11 pounds of soybeans for 33 pounds of coffee D) Chile and Colombia could not both gain from trade with each other at any price. -Refer to Figure 3-8.At which of the following prices would both Chile and Colombia gain from trade with each other?


A) 6 pounds of soybeans for 9 pounds of coffee
B) 8 pounds of soybeans for 20 pounds of coffee
C) 11 pounds of soybeans for 33 pounds of coffee
D) Chile and Colombia could not both gain from trade with each other at any price.

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

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Figure 3-6 Figure 3-6 -Refer to Figure 3-6.Maxine has an absolute advantage in the production of A) both goods and a comparative advantage in the production of pies. B) both goods and a comparative advantage in the production of tarts. C) neither good and a comparative advantage in the production of pies. D) neither good and a comparative advantage in the production of tarts. Figure 3-6 -Refer to Figure 3-6.Maxine has an absolute advantage in the production of A) both goods and a comparative advantage in the production of pies. B) both goods and a comparative advantage in the production of tarts. C) neither good and a comparative advantage in the production of pies. D) neither good and a comparative advantage in the production of tarts. Figure 3-6 -Refer to Figure 3-6.Maxine has an absolute advantage in the production of A) both goods and a comparative advantage in the production of pies. B) both goods and a comparative advantage in the production of tarts. C) neither good and a comparative advantage in the production of pies. D) neither good and a comparative advantage in the production of tarts. -Refer to Figure 3-6.Maxine has an absolute advantage in the production of


A) both goods and a comparative advantage in the production of pies.
B) both goods and a comparative advantage in the production of tarts.
C) neither good and a comparative advantage in the production of pies.
D) neither good and a comparative advantage in the production of tarts.

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

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Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Table 3-2 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. -Refer to Table 3-2.Iceland should export A) coolers and import radios. B) radios and import coolers. C) both goods and import neither good. D) neither good and import both goods. -Refer to Table 3-2.Iceland should export


A) coolers and import radios.
B) radios and import coolers.
C) both goods and import neither good.
D) neither good and import both goods.

E) All of the above
F) A) and B)

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For two individuals who engage in the same two productive activities,it is impossible for one of the two individuals to


A) have a comparative advantage in both activities.
B) have an absolute advantage in both activities.
C) be more productive per unit of time in both activities.
D) gain from trade with each other.

E) A) and C)
F) B) and C)

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Trade allows a person to obtain goods at prices that are less than that person's opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost.

A) True
B) False

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A production possibilities frontier is bowed outward when


A) the more resources the economy uses to produce one good,the fewer resources it has available to produce the other good.
B) an economy is self-sufficient instead of interdependent and engaged in trade.
C) the rate of tradeoff between the two goods being produced is constant.
D) the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

E) C) and D)
F) None of the above

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Figure 3-9 Figure 3-9 -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is A) 15 bolts and 40 nails. B) 25 bolts and 70 nails. C) 30 bolts and 80 nails. D) 50 bolts and 140 nails. Figure 3-9 -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is A) 15 bolts and 40 nails. B) 25 bolts and 70 nails. C) 30 bolts and 80 nails. D) 50 bolts and 140 nails. Figure 3-9 -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is A) 15 bolts and 40 nails. B) 25 bolts and 70 nails. C) 30 bolts and 80 nails. D) 50 bolts and 140 nails. -Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is


A) 15 bolts and 40 nails.
B) 25 bolts and 70 nails.
C) 30 bolts and 80 nails.
D) 50 bolts and 140 nails.

E) B) and D)
F) B) and C)

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Suppose that a worker in Radioland can produce either 4 radios or 1 television per year,and a worker in Teeveeland can produce either 2 radios or 4 televisions per year.Each nation has 100 workers.Also suppose that each country completely specializes in producing the good in which it has a comparative advantage.If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year,then each country's maximum consumption of new radios and televisions per year will be


A) 100 radios,300 televisions in Radioland and 300 radios,100 televisions in Teeveeland.
B) 300 radios,100 televisions in Radioland and 100 radios,300 televisions in Teeveeland.
C) 200 radios,100 televisions in Radioland and 100 radios,200 televisions in Teeveeland.
D) 300 radios,100 televisions in Radioland and 100 radios,400 televisions in Teeveeland.

E) B) and C)
F) C) and D)

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Adam Smith developed the theory of comparative advantage as we know it today.

A) True
B) False

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Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. -Refer to Table 3-4.Which of the following combinations of meat and potatoes could the farmer produce in 24 hours? A) 1 pound of meat and 8 pounds of potatoes. B) 2 pounds of meat and 5 pounds of potatoes. C) 3 pounds of meat and 12 pounds of potatoes. D) 4 pounds of meat and 8 pounds of potatoes. -Refer to Table 3-4.Which of the following combinations of meat and potatoes could the farmer produce in 24 hours?


A) 1 pound of meat and 8 pounds of potatoes.
B) 2 pounds of meat and 5 pounds of potatoes.
C) 3 pounds of meat and 12 pounds of potatoes.
D) 4 pounds of meat and 8 pounds of potatoes.

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

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Figure 3-3 Figure 3-3 -Refer to Figure 3-3.Arturo should specialize in the production of A) tacos and Dina should specialize in the production of burritos. B) burritos and Dina should specialize in the production of tacos. C) both goods and Dina should specialize in the production of neither good. D) neither good and Dina should specialize in the production of both goods. Figure 3-3 -Refer to Figure 3-3.Arturo should specialize in the production of A) tacos and Dina should specialize in the production of burritos. B) burritos and Dina should specialize in the production of tacos. C) both goods and Dina should specialize in the production of neither good. D) neither good and Dina should specialize in the production of both goods. Figure 3-3 -Refer to Figure 3-3.Arturo should specialize in the production of A) tacos and Dina should specialize in the production of burritos. B) burritos and Dina should specialize in the production of tacos. C) both goods and Dina should specialize in the production of neither good. D) neither good and Dina should specialize in the production of both goods. -Refer to Figure 3-3.Arturo should specialize in the production of


A) tacos and Dina should specialize in the production of burritos.
B) burritos and Dina should specialize in the production of tacos.
C) both goods and Dina should specialize in the production of neither good.
D) neither good and Dina should specialize in the production of both goods.

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

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Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. 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.If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese,then England will consume A) 34 units of cheese and 2 units of bread and Spain will consume 6 units of cheese and 3 units of bread. B) 34 units of cheese and 2 units of bread and Spain will consume 16 units of cheese and 3 units of bread. C) 34 units of cheese and 12 units of bread and Spain will consume 6 units of cheese and 3 units of bread. D) 34 units of cheese and 12 units of bread and Spain will consume 16 units of cheese and 3 units of bread. -Refer to Table 3-5.If England and Spain each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 2 units of bread for 6 units of cheese,then England will consume


A) 34 units of cheese and 2 units of bread and Spain will consume 6 units of cheese and 3 units of bread.
B) 34 units of cheese and 2 units of bread and Spain will consume 16 units of cheese and 3 units of bread.
C) 34 units of cheese and 12 units of bread and Spain will consume 6 units of cheese and 3 units of bread.
D) 34 units of cheese and 12 units of bread and Spain will consume 16 units of cheese and 3 units of bread.

E) All of the above
F) A) and D)

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Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. 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.At which of the following prices would both England and Spain gain from trade with each other? A) 16 units of bread for 16 units of cheese B) 16 units of bread for 24 units of cheese C) 16 units of bread for 48 units of cheese D) England and Spain could not both gain from trade with each other at any price. -Refer to Table 3-5.At which of the following prices would both England and Spain gain from trade with each other?


A) 16 units of bread for 16 units of cheese
B) 16 units of bread for 24 units of cheese
C) 16 units of bread for 48 units of cheese
D) England and Spain could not both gain from trade with each other at any price.

E) A) and C)
F) A) and B)

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Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. Table 3-8 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-8.At which of the following prices would both Huang and Min gain from trade with each other? A) 15 parasols for 10 plates B) 15 parasols for 6 plates C) 15 parasols for 3 plates D) Huang and Min could not both gain from trade with each other at any price. -Refer to Table 3-8.At which of the following prices would both Huang and Min gain from trade with each other?


A) 15 parasols for 10 plates
B) 15 parasols for 6 plates
C) 15 parasols for 3 plates
D) Huang and Min could not both gain from trade with each other at any price.

E) A) and B)
F) All of the above

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Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. -Refer to Table 3-6.We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel.If we were to do this,measuring toasters along the horizontal axis,then A) the slope of Maya's production possibilities frontier would be -1.6 and the slope of Miguel's production possibilities frontier would be -2. B) the slope of Maya's production possibilities frontier would be -0.625 and the slope of Miguel's production possibilities frontier would be -0.5. C) the slope of Maya's production possibilities frontier would be 0.625 and the slope of Miguel's production possibilities frontier would be 0.5. D) the slope of Maya's production possibilities frontier would be 1.6 and the slope of Miguel's production possibilities frontier would be 2. -Refer to Table 3-6.We could use the information in the table to draw a production possibilities frontier for Maya and a second production possibilities frontier for Miguel.If we were to do this,measuring toasters along the horizontal axis,then


A) the slope of Maya's production possibilities frontier would be -1.6 and the slope of Miguel's production possibilities frontier would be -2.
B) the slope of Maya's production possibilities frontier would be -0.625 and the slope of Miguel's production possibilities frontier would be -0.5.
C) the slope of Maya's production possibilities frontier would be 0.625 and the slope of Miguel's production possibilities frontier would be 0.5.
D) the slope of Maya's production possibilities frontier would be 1.6 and the slope of Miguel's production possibilities frontier would be 2.

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

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Figure 3-7 Figure 3-7 -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? A) 1 bowl and 14 cups B) 2 bowls and 11 cups C) 3 bowls and 10 cups D) 5 bowls and 5 cups Figure 3-7 -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? A) 1 bowl and 14 cups B) 2 bowls and 11 cups C) 3 bowls and 10 cups D) 5 bowls and 5 cups Figure 3-7 -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? A) 1 bowl and 14 cups B) 2 bowls and 11 cups C) 3 bowls and 10 cups D) 5 bowls and 5 cups -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?


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

E) All of the above
F) B) and C)

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Figure 3-4 Figure 3-4 -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is A) 2 novels and 6 poems. B) 3 novels and 12 poems. C) 4 novels and 12 poems. D) 6 novels and 24 poems. Figure 3-4 -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is A) 2 novels and 6 poems. B) 3 novels and 12 poems. C) 4 novels and 12 poems. D) 6 novels and 24 poems. Figure 3-4 -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is A) 2 novels and 6 poems. B) 3 novels and 12 poems. C) 4 novels and 12 poems. D) 6 novels and 24 poems. -Refer to Figure 3-4.If Perry and Jordan each divides their time equally between writing novels and writing poems,then total production is


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) C) and D)
F) A) and B)

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Which of the following would not result from all countries specializing according to the principle of comparative advantage?


A) The size of the economic pie would increase.
B) Worldwide production of goods and services would increase.
C) The well-being of citizens in each country would be enhanced.
D) Each country's production possibilities frontier would shift inward.

E) B) and D)
F) B) and C)

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For a country producing two goods,the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

A) True
B) False

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