Econ Ch3

Before Frank and Ruby engage in trade, each of them

• consumes at a point on his or her production

  possibilities frontier.

• consumes at a point inside his or her production possibilities frontier.

• consumes the same amounts of meat and

  potatoes as the other.

• consumes at a point outside his or her production possibilities frontier.

After Frank and Ruby engage in trade, each of them

• consumes at a point on his or her production

  possibilities frontier.

• consumes at a point inside his or her production

  possibilities frontier.

• consumes the same amounts of meat and

  potatoes as the other.

• consumes at a point outside his or her production

  possibilities frontier.

In an hour, Mateo can wash 2 cars or mow 1 lawn,

and Sophia can wash 3 cars or mow 1 lawn. Who

has the absolute advantage in car washing, and who

has the absolute advantage in lawn mowing?

• Sophia in washing, Mateo in mowing.

• Mateo in washing, Sophia in mowing.

• Sophia in washing, neither in mowing.

• Mateo in washing, neither in mowing.

In an hour, Mateo can wash 2 cars or mow 1 lawn,

and Sophia can wash 3 cars or mow 1 lawn.
Who has the

comparative advantage in car washing, and who has the comparative advantage in lawn mowing?

• Sophia in washing, Mateo in mowing.

• Mateo in washing, Sophia in mowing.

• Sophia in washing, neither in mowing.

• . Mateo in washing, neither in mowing.

In an hour, Mateo can wash 2 cars or mow 1 lawn,

and Sophia can wash 3 cars or mow 1 lawn. When Mateo and Sophia produce efficiently

and make a mutually beneficial trade based on

comparative advantage,

• Mateo washes more and Sophia mows more.

• Mateo mows more and Sophia washes more.

• Mateo and Sophia both mow more.

• Mateo and Sophia both wash more.

A nation will typically import those goods in which

• the nation has a comparative advantage.

• the nation has an absolute advantage.

• other nations have an absolute advantage.

• other nations have a comparative advantage.

Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt takes 2 hours of labor. In China, producing an aircraft takes 40,000 hours of labor and producing a shirt takes 4 hours of labor. What will these nations trade?

• China will export shirts, and the United States will export aircraft.

• China will export aircraft, and the United States will export shirts.

• Both nations will export shirts.

• There are no gains from trade in this situation.

Kayla can cook dinner in 30 minutes and wash the laundry in 20 minutes. Her roommate takes twice as long to do each task. How should the roommates allocate the work?

• Kayla should do more of the washing based on

  her comparative advantage.

• Kayla should do more of the cooking based on

  her comparative advantage.

• Kayla should do more of the washing based on

  her absolute advantage.

• There are no gains from trade in this situation.