ECO121_ 1->50

When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all 

• rely upon the government to provide us with the basic necessities of life.

• have similar tastes and abilities.

• have similar tastes and abilities.

• rely upon one another for the goods and services we consume.

When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy

• rises

• falls.

• may fall, rise, or stay the same

• stays the same.

Assume for Namibia that the opportunity cost of each hut is 200 bowls. Then which of these pairs of points could be on Namibia's production possibilities frontier

• (300 huts, 60,000 bowls) and (200 huts, 80,000 bowls)

• (200 huts, 30,000 bowls) and (150 huts, 35,000 bowls)

• (200 huts, 40,000 bowls) and (150 huts, 30,000 bowls)

• (300 huts, 50,000 bowl) and (200 huts, 60,000 bowls)

Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 30 workers in each country. No trade occurs between the two countries. Boatland produces and consumes 75 units of wheat and 375 units of fish per year while Farmland produces and consumes 375 units of wheat and 75 units of fish per year. If trade were to occur, Boatland would trade 90 units of fish to Farmland in exchange for 80 units of wheat. If Boatland now completely specializes in fish production, how many units of fish could it now consume along with the 80 units of imported wheat?

• 660 units

• 610 units

• 490 units

• 500 units

Refer to Figure 3-7. The opportunity cost of 1 bowl for Juba is

• 4 cups

• 2/3 cup

• 1/4 cup

• 3/2 cups

People who provide you with goods and services

• have chosen not to become interdependent.

• are required to do so by the government.

• do so because they get something in return.

• are acting out of generosity.

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats. If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by

• 280 bushels of corn and 450 bushels of oats.

• 340 bushels of corn and 500 bushels of oats.

• 360 bushels of corn and 520 bushels of oats.

• 360 bushels of corn and 640 bushels of oats.

Refer to Figure 3-3. Enid has an absolute advantage in the production of

• burritos and a comparative advantage in the production of tacos.

• burritos and a comparative advantage in the production of burritos.

• neither good and a comparative advantage in the production of tacos.

• neither good and a comparative advantage in the production of burritos.

By definition, imports are

• people who work in foreign countries.

• goods in which a country has an absolute advantage.

• limits placed on the quantity of goods leaving a country.

• goods produced abroad and sold domestically

Refer to Table 3-11. Assume that Falda and Varick each has 1 hour available. If each person divides their time equally between the production of wheat and cloth, then total production is

• 4 bushels of wheat and 7.5 yards of cloth.

• 7 bushels of wheat and 13.5 yards of cloth.

• 8 bushels of wheat and 15 yards of cloth.

• 14 bushels of wheat and 27 yards of cloth.