ch 3 - Chapter 3 Interdependence and the Gains from Trade...

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Chapter 3 Interdependence and the Gains from Trade Multiple Choice 1. People who provide you with goods and services a. are acting out of generosity. b. do so because they have no other choice. c. do so because they get something in return. d. are required to do so by government. ANS: C PTS: 1 DIF: 1 REF: 3-0 TOP: Trade MSC: Interpretive 2. 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 a. rely upon government to provide us with the basic necessities of life. b. rely upon one another for the goods and services we all consume. c. have similar tastes and abilities. d. are concerned about one another’s well-being. ANS: B PTS: 1 DIF: 1 REF: 3-0 TOP: Trade MSC: Interpretive 3. People generally choose to depend upon others for goods and services. Economists view this interdependence as a. a good thing, since it fosters friendships and bonds that otherwise would never develop. b. a good thing, since it allows people to consume more goods and services than they would otherwise be able to consume. c. a bad thing, since self-sufficiency may become necessary in the future. d. a bad thing, since interdependence reduces people’s self-esteem and causes various social problems. ANS: B PTS: 1 DIF: 1 REF: 3-1 TOP: Trade MSC: Interpretive 4. Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. In this case, trade could a. benefit both Jayson and Regan. b. benefit Jayson, but not Regan. c. benefit Regan, but not Jayson. d. benefit neither Jayson nor Regan. ANS: A PTS: 1 DIF: 2 REF: 3-1 TOP: Trade MSC: Interpretive 5. Ben bakes bread and Shawna knits sweaters. Ben likes to eat bread and wear sweaters, and the same is true for Shawna. In which of the following cases is it impossible for both Ben and Shawna to benefit from trade? a. Ben cannot knit sweaters and Shawna cannot bake bread. b. Ben is better than Shawna at baking bread and Shawna is better than Ben at knitting sweaters. c. Ben is better than Shawna at baking bread and at knitting sweaters. d. None of the above is correct. ANS: D PTS: 1 DIF: 2 REF: 3-1 TOP: Trade MSC: Applicative 6. Shannon bakes cookies and Justin grows vegetables. In which of the following cases is it impossible for both Shannon and Justin to benefit from trade? a. Shannon does not like vegetables and Justin does not like cookies. b. Shannon is better than Justin at baking cookies and Justin is better than Shannon at growing vegetables. c. Justin is better than Shannon at baking cookies and at growing vegetables. d. All of the above are correct. ANS: A PTS: 1 DIF: 2 REF: 3-1 TOP: Trade MSC: Applicative 80
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81 Chapter 3/Interdependence and the Gains from Trade 7. Consider a shoemaker and a vegetable farmer. Potentially, trade could benefit both individuals if a. the shoemaker can produce only shoes and the vegetable farmer can produce only vegetables. b. the shoemaker is capable of growing vegetables, but he is not very good at it.
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ch 3 - Chapter 3 Interdependence and the Gains from Trade...

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