63. Refer to Table 3-21. Jamaica has an absolute advantage in the production of
a.
coolers and Norway has an absolute advantage in the production of radios.
b.
radios and Norway has an absolute advantage in the production of coolers.
c.
both goods and Norway has an absolute advantage in the production of neither good.
d.
neither good and Norway has an absolute advantage in the production of both goods.
64. Refer to Table 3-21. Jamaica has a comparative advantage in the production of
a.
coolers and Norway has a comparative advantage in the production of radios.
b.
radios and Norway has a comparative advantage in the production of coolers.
c.
both goods and Norway has a comparative advantage in the production of neither good.
d.
neither good and Norway has a comparative advantage in the production of both goods.
65. Refer to Table 3-21. Jamaica should specialize in the production of
a.
b.
c.
d.
66. Refer to Table 3-21. Assume that Jamaica and Norway each has 4 days available for production. Originally, each
country divided its time equally between the production of coolers and radios. Now, each country spends all its time
producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by
a.
12.
b.
24.
c.
36.
d.
48.
67. Refer to Table 3-21. Assume that Jamaica and Norway each has 4 days available for production. Originally, each
country divided its time equally between the production of coolers and radios. Now, each country spends all its time
producing the good in which it has a comparative advantage. As a result, the total output of radios increased by
a.
3.
b.
6.
c.
9.
d.
12.
68. Refer to Table 3-21. At which of the following prices would both Jamaica and Norway gain from trade with each
other?
a.
1 radio for 1 cooler
b.
1 radio for 4 coolers
c.
1 radio for 10 coolers
d.
Jamaica and Norway would both gain from trade at all of the above prices.
69. Refer to Table 3-21. Jamaica and Norway would not be able to gain from trade if Norway’s opportunity cost of one
radio changed to
a.
0 coolers.
b.
1 cooler.
c.
2 coolers.
d.
Jamaica and Norway can always gain from trade regardless of their opportunity costs.
Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant
rate.
Machine Minutes
Needed to Make 1
Toothbrush
Hairbrush
Zimbabwe
3
10
Portugal
5
6
70. Refer to Table 3-22. Zimbabwe’s opportunity cost of one hairbrush is
a.
3/10 toothbrush and Portugal’s opportunity cost of one hairbrush is 5/6 toothbrush.
b.
3/10 toothbrush and Portugal’s opportunity cost of one hairbrush is 6/5 toothbrushes.
c.
10/3 toothbrushes and Portugal’s opportunity cost of one hairbrush is 5/6 toothbrush.
d.
10/3 toothbrushes and Portugal’s opportunity cost of one hairbrush is 6/5 toothbrushes.
71. Refer to Table 3-22. Suppose Zimbabwe decides to increase its production of toothbrushes by 10. What is the
opportunity cost of this decision?
a.
0.3 hairbrush
b.
3 hairbrushes
c.
30 hairbrushes
d.
100 hairbrushes
72. Refer to Table 3-22. Zimbabwe has an absolute advantage in the production of
a.
toothbrushes and a comparative advantage in the production of toothbrushes.
b.
toothbrushes and a comparative advantage in the production of hairbrushes.
c.
hairbrushes and a comparative advantage in the production of toothbrushes.
d.
hairbrushes and a comparative advantage in the production of hairbrushes.
73. Refer to Table 3-22. Portugal has an absolute advantage in the production of
a.
toothbrushes and a comparative advantage in the production of toothbrushes.
b.
toothbrushes and a comparative advantage in the production of hairbrushes.
c.
hairbrushes and a comparative advantage in the production of toothbrushes.
d.
hairbrushes and a comparative advantage in the production of hairbrushes.
74. Refer to Table 3-22. Assume that Zimbabwe and Portugal each has 60 machine minutes available. Originally, each
country divided its time equally between the production of toothbrushes and hairbrushes. Now, each country spends all its
time producing the good in which it has a comparative advantage. As a result, the total output increased by
a.
4 toothbrushes and 2 hairbrushes.
b.
10 toothbrushes and 5 hairbrushes.
c.
16 toothbrushes and 8 hairbrushes.
d.
20 toothbrushes and 10 hairbrushes.
75. Refer to Table 3-22. Zimbabwe and Portugal would not be able to gain from trade if Zimbabwe’s opportunity cost of
one toothbrush changed to
a.
0 hairbrushes.
b.
5/6 hairbrushes.
c.
6/5 hairbrushes.
d.
Zimbabwe and Portugal can always gain from trade regardless of their opportunity costs.
Table 3-23
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate.
Labor Hours Needed to Make 1 Pound of
Pounds Produced in 24 Hours
Pork
Tomatoes
Pork
Tomatoes
Farmer
6
3
4
8
Rancher
4
4
6
6
76. Refer to Table 3-23. The opportunity cost of 1 pound of pork for the farmer is
a.
1/2 pound of tomatoes.
b.
1/2 hour of labor.
c.
2 pounds of tomatoes.
d.
2 hours of labor.
77. Refer to Table 3-23. The opportunity cost of 1 pound of pork for the rancher is
a.
1 pound of tomatoes.
b.
1 hour of labor.
c.
1.5 pounds of tomatoes.
d.
1.5 hours of labor.
78. Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the farmer is
a.
1/2 pound of pork.
b.
2 hours of labor.
c.
2 pounds of pork.
d.
4 hours of labor.
79. Refer to Table 3-23. The opportunity cost of 1 pound of tomatoes for the rancher is
a.
1 pound of pork.
b.
1 hour of labor.
c.
1.5 pounds of pork.
d.
1.5 hours of labor.
80. Refer to Table 3-23. The farmer has an absolute advantage in the production of
a.
pork.
b.
tomatoes.
c.
both goods.
d.
neither good.
81. Refer to Table 3-23. The rancher has an absolute advantage in the production of
a.
pork.
b.
tomatoes.
c.
both goods.
d.
neither good.
82. Refer to Table 3-23. The farmer has a comparative advantage in the production of
a.
pork.
b.
tomatoes.
c.
both goods.
d.
neither good.
83. Refer to Table 3-23. The rancher has a comparative advantage in the production of
a.
pork.
b.
tomatoes.
c.
both goods.
d.
neither good.
84. Refer to Table 3-23. The farmer should specialize in the production of
a.
pork and the rancher should specialize in the production of tomatoes.
b.
tomatoes and the rancher should specialize in the production of pork.
c.
both goods and the rancher should specialize in the production of neither good.
d.
neither good and the rancher should specialize in the production of both goods.
85. Refer to Table 3-23. Assume that the farmer and the rancher each has 24 labor hours available. If each person spends
all his time producing the good in which he has a comparative advantage, then total production is
a.
4 pounds of pork and 6 pounds of tomatoes.
b.
6 pounds of pork and 8 pounds of tomatoes.
c.
4 pounds of pork and 8 pounds of tomatoes.
d.
6 pounds of pork and 6 pounds of tomatoes.
86. Refer to Table 3-23. Assume that the farmer and the rancher each has 24 labor hours available. If each person spends
all his time producing the good in which he has a comparative advantage and trade takes place at a price of 1 pound of
pork for 2 pounds of tomatoes, then
a.
the farmer and the rancher will both gain from this trade.
b.
the farmer will gain from this trade, but the rancher will not.
c.
the rancher will gain from this trade, but the farmer will not.
d.
neither the farmer nor the rancher will gain from this trade.
87. Refer to Table 3-23. Without trade, the farmer produced and consumed 2 pounds of pork and 4 pounds of tomatoes
and the rancher produced and consumed 4 pounds of pork and 2 pounds of tomatoes. Then, each person agreed to
specialize in the production of the good in which he has a comparative advantage and trade 4 pounds of pork for 6 pounds
of tomatoes. As a result,
a.
the farmer gained 3 hours worth of production and the rancher gained 4 hours worth of production.
b.
the farmer gained 4 hours worth of production and the rancher gained 6 hours worth of production.
c.
the farmer gained 6 hours worth of production and the rancher gained 8 hours worth of production.
d.
the farmer gained 8 hours worth of production and the rancher gained 10 hours worth of production.
Table 3-24
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.
Labor Hours Needed to Make 1 Unit of
Number of Units Produced in 40 Hours
Cheese
Bread
Cheese
Bread
England
1
4
40
10
Spain
4
8
10
5
88. Refer to Table 3-24. The opportunity cost of 1 unit of cheese for England is
a.
1/4 unit of bread.
b.
1 hour of labor.
c.
4 units of bread.
d.
4 hours of labor.
89. Refer to Table 3-24. The opportunity cost of 1 unit of cheese for Spain is
a.
1/2 unit of bread.
b.
2 hours of labor.
c.
2 units of bread.
d.
4 hours of labor.
90. Refer to Table 3-24. The opportunity cost of 1 unit of bread for England is
a.
1/4 unit of cheese.
b.
1/4 hour of labor.
c.
4 units of cheese.
d.
4 hours of labor.
91. Refer to Table 3-24. The opportunity cost of 1 unit of bread for Spain is
a.
1/2 unit of cheese.
b.
1/2 hour of labor.
c.
2 units of cheese.
d.
8 hours of labor.
92. Refer to Table 3-24. England has an absolute advantage in the production of
a.
cheese and Spain has an absolute advantage in the production of bread.
b.
bread and Spain has an absolute advantage in the production of cheese.
c.
both goods and Spain has an absolute advantage in the production of neither good.
d.
neither good and Spain has an absolute advantage in the production of both goods.
93. Refer to Table 3-24. England has a comparative advantage in the production of
a.
cheese and Spain has a comparative advantage in the production of bread.
b.
bread and Spain has a comparative advantage in the production of cheese.
c.
both goods and Spain has a comparative advantage in the production of neither good.
d.
neither good and Spain has a comparative advantage in the production of both goods.
94. Refer to Table 3-24. England should specialize in the production of
a.
cheese and Spain should specialize in the production of bread.
b.
bread and Spain should specialize in the production of cheese.
c.
both goods and Spain should specialize in the production of neither good.
d.
neither good and Spain should specialize in the production of both goods.
95. Refer to Table 3-24. Assume that England and Spain each has 40 labor hours available. Originally, each country
divided its time equally between the production of cheese and bread. Now, each country spends all its time producing the
good in which it has a comparative advantage. As a result, the total output of cheese increased by
a.
15.
b.
20.
c.
25.
d.
40.
96. Refer to Table 3-24. 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.
97. Refer to Table 3-24. 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.
98. Refer to Table 3-24. Without trade, England produced and consumed 32 units of cheese and 2 units of bread and
Spain produced and consumed 6 units of cheese and 2 units of bread. Then, each country agreed to specialize in the
production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread. As a
result, England gained
a.
0 units of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
b.
1 unit of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
c.
7 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.
d.
33 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.
Table 3-25
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
Hours Needed to Make 1
Amount Produced in 40 Hours
mixer
toaster
mixers
toasters
Maya
8
5
5
8
Miguel
20
10
2
4
99. Refer to Table 3-25. The opportunity cost of 1 mixer for Maya is
a.
0.625 toasters.
b.
5 hours of labor.
c.
1.6 toasters.
d.
20 hours of labor.
100. Refer to Table 3-25. The opportunity cost of 1 mixer for Miguel is
a.
1/2 toaster.
b.
1/2 hour of labor.
c.
2 toasters.
d.
8 hours of labor.
101. Refer to Table 3-25. The opportunity cost of 1 toaster for Maya is
a.
0.625 mixers.
b.
1.6 hours of labor.
c.
1.6 mixers.
d.
8 hours of labor.
102. Refer to Table 3-25. The opportunity cost of 1 toaster for Miguel is
a.
1/2 mixer.
b.
2 hours of labor.
c.
2 mixers.
d.
20 hours of labor.
103. Refer to Table 3-25. Maya has an absolute advantage in the production of
a.
both goods and a comparative advantage in the production of mixers.
b.
both goods and a comparative advantage in the production of toasters.
c.
neither good and a comparative advantage in the production of mixers.
d.
neither good and a comparative advantage in the production of toasters.
104. Refer to Table 3-25. Miguel has an absolute advantage in the production of
a.
both goods and a comparative advantage in the production of mixers.
b.
both goods and a comparative advantage in the production of toasters.
c.
neither good and a comparative advantage in the production of mixers.
d.
neither good and a comparative advantage in the production of toasters.
105. Refer to Table 3-25. Maya should specialize in the production of
a.
mixers and Miguel should specialize in the production of toasters.
b.
toasters and Miguel should specialize in the production of mixers.
c.
both goods and Miguel should specialize in the production of neither good.
d.
neither good and Miguel should specialize in the production of both goods.
106. Refer to Table 3-25. At which of the following prices would both Maya and Miguel gain from trade with each
other?
a.
4 mixers for 7 toasters
b.
8 mixers for 10 toasters
c.
12 mixers for 18 toasters
d.
Maya and Miguel could not both gain from trade with each other at any price.
Table 3-26
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
Hours Needed to Make 1
Quantity Produced in 2400 Hours
Car
Airplane
Cars
Airplanes
Japan
30
150
80
16
Korea
50
150
48
16
107. Refer to Table 3-26. Japan’s opportunity cost of one airplane is
a.
1/5 car and Korea’s opportunity cost of one airplane is 1/3 car.
b.
1/5 car and Korea’s opportunity cost of one airplane is 3 cars.
c.
5 cars and Korea’s opportunity cost of one airplane is 1/3 car.
d.
5 cars and Korea’s opportunity cost of one airplane is 3 cars.
108. Refer to Table 3-26. Japan’s opportunity cost of one car is
a.
1/5 airplane and Korea’s opportunity cost of one car is 1/3 airplane.
b.
1/5 airplane and Korea’s opportunity cost of one car is 3 airplanes.
c.
5 airplanes and Korea’s opportunity cost of one car is 1/3 airplane.
d.
5 airplanes and Korea’s opportunity cost of one car is 3 airplanes.
109. Refer to Table 3-26. Suppose Japan decides to increase its production of cars by 45. What is the opportunity cost of
this decision?
a.
9 airplanes
b.
15 airplanes
c.
135 airplanes
d.
225 airplanes
110. Refer to Table 3-26. Suppose Korea decides to increase its production of cars by 18. What is the opportunity cost of
this decision?
a.
3 airplanes
b.
6 airplanes
c.
16 airplanes
d.
150 airplanes
111. Refer to Table 3-26. Japan has an absolute advantage in the production of
a.
cars and a comparative advantage in the production of cars.
b.
cars and a comparative advantage in the production of airplanes.
c.
neither good and a comparative advantage in the production of cars.
d.
neither good and a comparative advantage in the production of airplanes.
112. Refer to Table 3-26. Korea has an absolute advantage in the production of
a.
cars and a comparative advantage in the production of cars.
b.
cars and a comparative advantage in the production of airplanes.
c.
neither good and a comparative advantage in the production of cars.
d.
neither good and a comparative advantage in the production of airplanes.
113. Refer to Table 3-26. Assume that Japan and Korea each has 2400 hours available. Originally, each country divided
its time equally between the production of cars and airplanes. Now, each country spends all its time producing the good in
which it has a comparative advantage. As a result, the total output of cars increased by
a.
16.
b.
40.
c.
64.
d.
80.
114. Refer to Table 3-26. Japan and Korea would not be able to gain from trade if Korea’s opportunity cost of one car
changed to
a.
1/5 airplane.
b.
1/3 airplane.
c.
3 airplanes.
d.
5 airplanes.
115. Refer to Table 3-26. Assume that Japan and Korea each has 2400 hours available. If each country spends all its time
producing the good in which it has a comparative advantage and trade takes place at a price of 12 cars for 6 airplanes, then
a.
Japan and Korea will both gain from this trade.
b.
Japan will gain from this trade, but Korea will not.
c.
Korea will gain from this trade, but Japan will not.
d.
neither Japan nor Korea will gain from this trade.
116. Refer to Table 3-26. Without trade, Japan produced and consumed 50 cars and 6 airplanes and Korea produced and
consumed 27 cars and 7 airplanes. Then, each country agreed to specialize in the production of the good in which it has a
comparative advantage and trade 28 cars for 8 airplanes. As a result, Japan gained
a.
0 cars and 2 airplanes and Korea gained 1 car and 1 airplane.
b.
2 cars and 2 airplanes and Korea gained 1 car and 1 airplane.
c.
28 cars and 8 airplanes and Korea gained 28 cars and 8 airplanes.
d.
52 cars and 8 airplanes and Korea gained 28 cars and 8 airplanes.
Table 3-27
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
Labor Hours Needed to Make 1
Quantity Produced in 36 Hours
Parasol
Plate
Parasol
Plate
Huang
2
6
18
6
Min
2
4
18
9
117. Refer to Table 3-27. The opportunity cost of 1 parasol for Huang is
a.
1/3 plate.
b.
1/2 plate.
c.
3 plates.
d.
6 plates.
118. Refer to Table 3-27. The opportunity cost of 1 parasol for Min is
a.
1/3 plate.
b.
1/2 plate.
c.
2 plates.
d.
3 plates.
119. Refer to Table 3-27. The opportunity cost of 1 plate for Huang is
a.
1/3 parasol.
b.
1/2 parasol.
c.
3 parasols.
d.
4 parasols.
120. Refer to Table 3-27. The opportunity cost of 1 plate for Min is
a.
1/3 parasol.
b.
1/2 parasol.
c.
2 parasols.
d.
3 parasols.
121. Refer to Table 3-27. Huang has an absolute advantage in the production of
a.
parasols and a comparative advantage in the production of parasols.
b.
parasols and a comparative advantage in the production of plates.
c.
neither good and a comparative advantage in the production of parasols.
d.
neither good and a comparative advantage in the production of plates.
122. Refer to Table 3-27. Min has an absolute advantage in the production of
a.
plates and a comparative advantage in the production of plates.
b.
parasols and a comparative advantage in the production of plates.
c.
neither good and a comparative advantage in the production of parasols.
d.
neither good and a comparative advantage in the production of plates.