Micro Homework Assignment 2

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.

Absolute advantage is found by comparing different producers'

Input requirements per unit of output.

For a self-sufficient producer, the production possibilities frontier

Is the same as the consumption possibilities frontier.

As a student, Jordyn spends 40 hours per week writing term papers and completing homework assignments. On one axis of Jordyn's production possibilities frontier (PPF) is measured the number of term papers written per week. On the other axis is measured the number of homework assignments completed per week. The PPF is a straight line if

Jordyn can switch between writing term papers and completing homework assignments at a constant rate.

Assume that Max and Min can switch between producing mittens and producing hats at a constant rate. Which of the following points would not be on Max's production possibilities frontier, based on a 36-hour production period?

(2 mittens, 6 hats)

Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Which of the following points would not be on Barb's production possibilities frontier, based on a 40-hour week?

(8 computers set up, 32 computers tested)

Specializing only in lemonade, Alice can produce

400 pitchers per day.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. 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

6

Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Refer to Table 3-5. Which of the following combinations of cheese and bread could Spain produce in 24 hours?

6 units of cheese and 1 units of bread

Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is

60 coolers and 18 radios

What must be given up to obtain an item is called

Opportunity cost.

If Shawn can produce more donuts in one day than Sue can produce in one day, then

Shawn has an absolute advantage in the production of donuts.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. At which of the following prices would both Jamaica and Norway gain from trade with each other?

1 radio for 4 coolers

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is

1/6 table for Ken and 1/3 table for Traci.

Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day, and a worker in Felinia can produce either 5 blankets or 1 meal per day. Each nation has 10 workers. For many years, the two countries traded, each completely specializing according to their respective comparative advantages. Now war has broken out between them and all trade has stopped. Without trade, Caninia produces and consumes 10 blankets and 40 meals per day and Felinia produces and consumes 25 blankets and 5 meals per day. The war has caused the combined daily output of the two countries to decline by

15 blankets and 35 meals.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. Refer to Table 3-11. Jamaica and Norway would not be able to gain from trade if Norway's opportunity cost of one radio changed to

2 coolers

If Arturo and Dina each divides his/her time equally between the production of tacos and burritos, then total production is

400 tacos and 250 burritos.

If the production possibilities frontier is bowed outward, then which of the following could represent the number of coats produced when 12 blankets are produced?

500

If a person chooses self-sufficiency, then they can only consume what they produce.

True