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Mac Econ 5
| Question | Answer |
|---|---|
| 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 |
| Trade allows a country to consume outside its production possibilities frontier. | true |
| 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 |
| Which of the following is not correct? | The gains from specialization and trade are based not on comparative advantage but on absolute advantage |
| The gains from trade are | a result of more efficient resource allocation than would be observed in the absence of trade |
| Opportunity cost measures the trade-off between two goods that each producer faces. | True |
| Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that | in order to consume beyond its PPF, the United States should produce more pork than what it requires and export some of it to Mexico |
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cupcake1010