Interdependence and the Gains from Trade 647
171. Refer to Figure 3-17. Suppose Maxine decides to increase her production of tarts by 5. What
is the opportunity cost of this decision?
a. 2/5 pie
b. 2 pies
c. 5/2 pies
d. 10 pies
172. Refer to Figure 3-17. Suppose Daisy decides to increase her production of pies by 6. What is
the opportunity cost of this decision?
a. 8/3 tarts
b. 4.5 tarts
c. 8 tarts
d. 10 tarts
648 Interdependence and the Gains from Trade
173. Refer to Figure 3-17. Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that
Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could
Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in
making tarts?
a. 4 pies and 6 tarts
b. 6 pies and 5 tarts
c. 8 pies and 3 tarts
d. 10 pies and 1.5 tarts
174. Refer to Figure 3-17. 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.
Interdependence and the Gains from Trade 649
175. Refer to Figure 3–17. Daisy 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.
176. Refer to Figure 3-17. If Maxine and Daisy switch from each person dividing her time equally
between the production of pies and tarts to each person spending all of her time producing the
good in which she has a comparative advantage, then total production of tarts will increase by
a. 7.
b. 10.
c. 17.
d. 20.
650 Interdependence and the Gains from Trade
177. Refer to Figure 3-17. At which of the following prices would both Maxine and Daisy gain
from trade with each other?
a. 4 tarts for 2 pies
b. 8 tarts for 12 pies
c. 12 tarts for 28 pies
d. Maxine and Daisy could not both gain from trade with each other at any price.
Figure 3-18
Bintu’s Production Possibilities Frontier Juba’s Production Possibilities Frontier
Interdependence and the Gains from Trade 651
178. Refer to Figure 3-18. The opportunity cost of 1 bowl for Bintu is
a. 1/4 cup.
b. 1/2 cup.
c. 2 cups.
d. 4 cups.
179. Refer to Figure 3-18. The opportunity cost of 1 bowl for Juba is
a. 1/4 cup.
b. 2/3 cup.
c. 3/2 cups.
d. 4 cups.
652 Interdependence and the Gains from Trade
180. Refer to Figure 3-18. The opportunity cost of 1 cup for Bintu is
a. 1/8 bowl.
b. 1/4 bowl.
c. 4 bowls.
d. 8 bowls.
181. Refer to Figure 3-18. The opportunity cost of 1 cup for Juba is
a. 1/6 bowl.
b. 2/3 bowl.
c. 3/2 bowls.
d. 6 bowls.
Interdependence and the Gains from Trade 653
182. Refer to Figure 3-18. Suppose Juba is willing to trade one bowl to Bintu for every two cups
that Bintu makes and sends to Juba. Which of the following combinations of bowls and cups
could Bintu then consume, assuming Bintu specializes in making cups and Juba specializes in
making bowls?
a. 1 bowl and 7 cups
b. 2 bowls and 4 cups
c. 3 bowls and 3 cups
d. 4 bowls and 1 cup
183. Refer to Figure 3–18. Bintu has an absolute advantage in the production of
a. bowls and Juba has an absolute advantage in the production of cups.
b. cups and Juba has an absolute advantage in the production of bowls.
c. both goods and Juba has an absolute advantage in the production of neither good.
d. neither good and Juba has an absolute advantage in the production of both goods.
654 Interdependence and the Gains from Trade
184. Refer to Figure 3-18. Bintu has a comparative advantage in the production of
a. bowls and Juba has a comparative advantage in the production of cups.
b. cups and Juba has a comparative advantage in the production of bowls.
c. both goods and Juba has a comparative advantage in the production of neither good.
d. neither good and Juba has a comparative advantage in the production of both goods.
185. Refer to Figure 3-18. If Bintu and Juba switch from each person dividing her time equally
between the production of cups and bowls to each person spending all of her time producing the
good in which she has a comparative advantage, then total production will increase by
a. 1 bowl and 1 cup.
b. 2 bowls and 4 cups.
c. 3 bowls and 5 cups.
d. 4 bowls and 8 cups.
Interdependence and the Gains from Trade 655
Figure 3-19
Chile’s Production Possibilities Frontier Colombia’s Production Possibilities
Frontier
186. Refer to Figure 3-19. Chile’s opportunity cost of one pound of coffee is
a. 3/4 pound of soybeans and Colombia’s opportunity cost of one pound of coffee is 1/2 pound
of soybeans.
b. 3/4 pound of soybeans and Colombia’s opportunity cost of one pound of coffee is 2 pounds of
soybeans.
c. 4/3 pounds of soybeans and Colombia’s opportunity cost of one pound of coffee is 1/2 pound
of soybeans.
d. 4/3 pounds of soybeans and Colombia’s opportunity cost of one pound of coffee is 2 pounds
of soybeans.
656 Interdependence and the Gains from Trade
187. Refer to Figure 3-19. Chile’s opportunity cost of one pound of soybeans is
a. 3/4 pound of coffee and Colombia’s opportunity cost of one pound of soybeans is 1/2 pound
of coffee.
b. 3/4 pound of coffee and Colombia’s opportunity cost of one pound of soybeans is 2 pounds of
coffee.
c. 4/3 pounds of coffee and Colombia’s opportunity cost of one pound of soybeans is 1/2 pound
of coffee.
d. 4/3 pounds of coffee and Colombia’s opportunity cost of one pound of soybeans is 2 pounds
of coffee.
188. Refer to Figure 3–19. Chile would incur an opportunity cost of 36 pounds of coffee if it
increased its production of soybeans by
a. 12 pounds.
b. 27 pounds.
c. 30 pounds.
d. 48 pounds.
Interdependence and the Gains from Trade 657
189. Refer to Figure 3-19. Colombia would incur an opportunity cost of 24 pounds of coffee if it
increased its production of soybeans by
a. 12 pounds.
b. 18 pounds.
c. 36 pounds.
d. 48 pounds.
190. Refer to Figure 3–19. Chile has an absolute advantage in the production of
a. coffee and Colombia has an absolute advantage in the production of soybeans.
b. soybeans and Colombia has an absolute advantage in the production of coffee.
c. both goods and Colombia has an absolute advantage in the production of neither good.
d. neither good and Colombia has an absolute advantage in the production of both goods.
658 Interdependence and the Gains from Trade
191. Refer to Figure 3-19. Chile has a comparative advantage in the production of
a. coffee and Colombia has a comparative advantage in the production of soybeans.
b. soybeans and Colombia has a comparative advantage in the production of coffee.
c. both goods and Colombia has a comparative advantage in the production of neither good.
d. neither good and Colombia has a comparative advantage in the production of both goods.
192. Refer to Figure 3-19. If Chile and Colombia switch from each country dividing its time equally
between the production of coffee and soybeans to each country spending all of its time producing
the good in which it has a comparative advantage, then total production of soybeans will
increase by
a. 3 pounds.
b. 6 pounds.
c. 9 pounds.
d. 12 pounds.
Interdependence and the Gains from Trade 659
193. Refer to Figure 3-19. 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.
194. Refer to Figure 3-19. If Chile and Colombia each spends all of its time producing the good in
which it has a comparative advantage and the countries agree to trade 7 pounds of coffee for 5
pounds of soybeans, then Chile will consume
a. 7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee
and 5 pounds of soybeans.
b. 7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee
and 11 pounds of soybeans.
c. 23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee
and 5 pounds of soybeans.
d. 23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee
and 11 pounds of soybeans.
660 Interdependence and the Gains from Trade
195. Refer to Figure 3-19. Chile and Colombia would not be able to gain from trade if Colombia’s
opportunity cost of one pound of soybeans changed to
a. 1/2 pound of coffee.
b. 3/4 pound of coffee.
c. 4/3 pounds of coffee.
d. 2 pounds of coffee.
Figure 3-20
Canada’s Production Possibilities Frontier Mexico’s Production Possibilities Frontier
Interdependence and the Gains from Trade 661
196. Refer to Figure 3–20. Canada’s opportunity cost of one unit of Good X is
a. 1/2 unit of Good Y and Mexico’s opportunity cost of one unit of Good X is 1/2 unit of Good Y.
b. 1/2 unit of Good Y and Mexico’s opportunity cost of one unit of Good X is 2 units of Good Y.
c. 2 units of Good Y and Mexico’s opportunity cost of one unit of Good X is 1/2 unit of Good Y.
d. 2 units of Good Y and Mexico’s opportunity cost of one unit of Good X is 2 units of Good Y.
197. Refer to Figure 3–20. Canada’s opportunity cost of one unit of Good Y is
a. 1/2 unit of Good X and Mexico’s opportunity cost of one unit of Good Y is 1/2 unit of Good X.
b. 1/2 unit of Good X and Mexico’s opportunity cost of one unit of Good Y is 2 units of Good X.
c. 2 units of Good X and Mexico’s opportunity cost of one unit of Good Y is 1/2 unit of Good X.
d. 2 units of Good X and Mexico’s opportunity cost of one unit of Good Y is 2 units of Good X.
662 Interdependence and the Gains from Trade
198. Refer to Figure 3-20. Canada would incur an opportunity cost of 6 units of Good X if it
increased its production of Good Y by
a. 3 units.
b. 6 units.
c. 9 units.
d. 12 units.
199. Refer to Figure 3-20. Mexico would incur an opportunity cost of 8 units of Good X if it
increased its production of Good Y by
a. 2 units.
b. 4 units.
c. 6 units.
d. 8 units.
Interdependence and the Gains from Trade 663
200. Refer to Figure 3-20. Canada has an absolute advantage in the production of
a. Good X and Mexico has an absolute advantage in the production of Good Y.
b. Good Y and Mexico has an absolute advantage in the production of Good X.
c. both goods and Mexico has an absolute advantage in the production of neither good.
d. neither good and Mexico has an absolute advantage in the production of both goods.
201. Refer to Figure 3-20. Canada has a comparative advantage in the production of
a. Good X and Mexico has a comparative advantage in the production of Good Y.
b. Good Y and Mexico has a comparative advantage in the production of Good X.
c. both goods and Mexico has a comparative advantage in the production of neither good.
d. neither good and Mexico has a comparative advantage in the production of both goods.
664 Interdependence and the Gains from Trade
202. Refer to Figure 3-20. If Canada and Mexico switch from each country dividing its time
equally between the production of Good X and Good Y to each country spending all of its time
producing the good in which it has a comparative advantage, then total production of Good X will
increase by
a. 3 units.
b. 6 units.
c. 9 units.
d. 12 units.
203. Refer to Figure 3-20. If Canada and Mexico switch from each country dividing its time
equally between the production of Good X and Good Y to each country spending all of its time
producing the good in which it has a comparative advantage, then total production of Good Y will
increase by
a. 3 units.
b. 6 units.
c. 9 units.
d. 12 units.
Interdependence and the Gains from Trade 665
204. Refer to Figure 3-20. At which of the following prices would both Canada and Mexico gain
from trade with each other?
a. 9 units of Good Y for 6 units of Good X
b. 8 units of Good Y for 20 units of Good X
c. 70 units of Good Y for 30 units of Good X
d. Canada and Mexico could not both gain from trade with each other at any price.
Figure 3-21
Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier
666 Interdependence and the Gains from Trade
205. Refer to Figure 3-21. Azerbaijan’s opportunity cost of one nail is
a. 1/4 bolt and Uzbekistan’s opportunity cost of one nail is 1/2 bolt.
b. 1/4 bolt and Uzbekistan’s opportunity cost of one nail is 2 bolts.
c. 4 bolts and Uzbekistan’s opportunity cost of one nail is 1/2 bolt.
d. 4 bolts and Uzbekistan’s opportunity cost of one nail is 2 bolts.
206. Refer to Figure 3-21. Azerbaijan’s opportunity cost of one bolt is
a. 1/4 nail and Uzbekistan’s opportunity cost of one bolt is 1/2 nail.
b. 1/4 nail and Uzbekistan’s opportunity cost of one bolt is 2 nails.
c. 4 nails and Uzbekistan’s opportunity cost of one bolt is 1/2 nail.
d. 4 nails and Uzbekistan’s opportunity cost of one bolt is 2 nails.