Chapter 3

Before Frank and ruby engage in trade, each of them

• a. consumes at a point inside his or her productionpossibilities frontier.

• b. consumes at a point on his or her productionpossibilities frontier.

• c. consumes at a point outside his or her productionpossibilities frontier.

• d. consumes the same amounts of meat andpotatoes as the other.

After Frank and ruby engage in trade, each of them

• a. consumes at a point inside his or her productionpossibilities frontier

• b. consumes at a point on his or her productionpossibilities frontier

• c. consumes at a point outside his or her productionpossibilities frontier

• d. consumes the same amounts of meat andpotatoes as the other

in an hour, mateo can wash 2 cars or mow 1 lawn,and Sophia can wash 3 cars or mow 1 lawn. Whohas the absolute advantage in car washing, and whohas the absolute advantage in lawn mowing?

• a. mateo in washing, Sophia in mowing

• b. Sophia in washing, mateo in mowing

• c. mateo in washing, neither in mowing

• d. Sophia in washing, neither in mowing

Between mateo and Sophia, who has thecomparative advantage in car washing, and who hasthe comparative advantage in lawn mowing?

• a. Mateo in washing, Sophia in mowing

• b. Sophia in washing, mateo in mowing

• c. Mateo in washing, neither in mowing

• d. Sophia in washing, neither in mowing

When mateo and Sophia produce efficientlyand make a mutually beneficial trade based oncomparative advantage,

• a. Mateo mows more and Sophia washes more.

• b. Mateo washes more and Sophia mows more.

• c. Mateo and Sophia both wash more.

• d. Mateo and Sophia both mow more.

A nation will typically import those goods in which

• a. the nation has an absolute advantage.

• b. the nation has a comparative advantage.

• c. other nations have an absolute advantage.

• d. other nations have a comparative advantage

Suppose that in the united States, producing anaircraft takes 10,000 hours of labor and producing ashirt takes 2 hours of labor. in china, producing anaircraft takes 40,000 hours of labor and producing ashirt takes 4 hours of labor. What will these nationstrade?

• a. china will export aircraft, and the united States will export shirts

• b. china will export shirts, and the united States will export aircraft

• c. Both nations will export shirts

• d. there are no gains from trade in this situation

Kayla can cook dinner in 30 minutes and wash thelaundry in 20 minutes. her roommate takes twiceas long to do each task. how should the roommatesallocate the work?

• a. Kayla should do more of the cooking based onher comparative advantage.

• b. Kayla should do more of the washing based onher comparative advantage.

• c. Kayla should do more of the washing based onher absolute advantage.

• d. There are no gains from trade in this situation.