Intro to food and resource economics Chapter 3 quizzes
If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then
Iowa has a comparative advantage in the production of corn.
The gains from trade are
a result of more efficient resource allocation than would be observed in the absence of trade
Trade between countries
allows each country to consume at a point outside its production possibilities frontier
The most obvious benefit of specialization and trade is that they allow us to
consume more goods than we otherwise would be able to consume.
By definition, exports are
goods produced domestically and sold abroad
A popular celebrity that is paid highly for her time should probably not mow her own lawn because
her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her.
As a student, Jordyn spends 40 hours per week writing term papers and completing homework assignments. On one axis of her production possibilities frontier is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. Jordyn's production possibilities frontier is a straight line if
she can switch between writing term papers and completing homework assignments at a constant rate.
The production possibilities frontier illustrates
the combinations of output that an economy can produce
A production possibilities frontier is bowed outward when
the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when
they choose not to trade with one another.
