Question 1

Adam Smith asserted that a person should never attempt to make at home

Accepted Answer

A)   what it will cost him more to make than to buy.
B)   any good in which that person does not have an absolute advantage.
C)   any luxury good.
D)   any necessity.E) None of the above
F) A) and D)

Question 2

Figure 3-3
   
-Refer to Figure 3-3.Arturo's opportunity cost of one burrito is

Accepted Answer

A)   3/4 taco and Dina's opportunity cost of one burrito is 1/2 taco.
B)   3/4 taco and Dina's opportunity cost of one burrito is 2 tacos.
C)   4/3 tacos and Dina's opportunity cost of one burrito is 1/2 taco.
D)   4/3 tacos and Dina's opportunity cost of one burrito is 2 tacos.E) None of the above
F) C) and D)

Question 3

Figure 3-3
   
-Refer to Figure 3-3.Without trade,Arturo produced and consumed 240 tacos and 120 burritos and Dina produced and consumed 100 tacos and 150 burritos.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 260 tacos for 156 burritos.As a result,Arturo gained

Accepted Answer

A)   20 tacos and 24 burritos and Dina gained 40 tacos and 6 burritos.
B)   20 tacos and 36 burritos and Dina gained 160 tacos and 6 burritos.
C)   260 tacos and 144 burritos and Dina gained 140 tacos and 156 burritos.
D)   260 tacos and 156 burritos and Dina gained 260 tacos and 156 burritos.E) A) and C)
F) None of the above

Question 4

Figure 3-9
   
-Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Accepted Answer

A)   1/4 bolt
B)   4 bolts
C)   5 bolts
D)   80 boltsE) A) and D)
F) All of the above

Question 5

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. 
-Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Accepted Answer

A)   0.75 pound.
B)   0.80 pound.
C)   1.00 pounds.
D)   1.25 pounds.E) B) and C)
F) C) and D)

Question 6

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Accepted Answer

A) True 
 B)False

Exam 3: Interdependence and the Gains From Trade

Adam Smith asserted that a person should never attempt to make at home

Correct Answer
verified

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Correct Answer
verified

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Correct Answer
verified

Figure 3-3 -Refer to Figure 3-3.Arturo's opportunity cost of one burrito is

Correct Answer
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Figure 3-9 -Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Correct Answer
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Correct Answer
verified

Exam 3: Interdependence and the Gains From Trade

Adam Smith asserted that a person should never attempt to make at home

Correct AnswerverifiedShow Answer

When each person specializes in producing the good in which he or she has a comparative advantage,each person can gain from trade but total production in the economy is unchanged.

Correct AnswerverifiedShow Answer

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by

Correct AnswerverifiedShow Answer

Figure 3-3 -Refer to Figure 3-3.Arturo's opportunity cost of one burrito is

Correct AnswerverifiedShow Answer

Figure 3-9 -Refer to Figure 3-9.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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