Problem set 1

# Problem set 1 - Name Recitation Day Recitation Time Problem...

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Name Recitation Day Recitation Time Problem Set #1 T.A. Joe Craig Figure 3-3 1.Refer to Figure 3-3. The opportunity cost of 1 pair of tap shoes for Fred is a. 1/3 pair of ballet slippers. b. 1/5 pair of ballet slippers. c. 3/5 pair of ballet slippers. d. 5/3 pairs of ballet slippers. 2.Refer to Figure 3-3. The opportunity cost of 1 pair of ballet slippers for Ginger is a. 1/4 pair of tap shoes. b. 1/3 pair of tap shoes. c. 3/4 pair of tap shoes. d. 4/3 pairs of tap shoes. 3.Refer to Figure 3-3. Ginger has a comparative advantage in a. tap shoes and Fred has a comparative advantage in ballet slippers. b. both goods and Fred has a comparative advantage in neither good. c. ballet slippers and Fred has a comparative advantage in tap shoes. d. neither good and Fred has a comparative advantage in both goods. 4.Refer to Figure 3-3. Ginger should specialize in a. tap shoes and Fred should specialize in ballet slippers. b. both goods and Fred should specialize in neither good. c. ballet slippers and Fred should specialize in tap shoes. d. neither good and Fred should specialize in both goods.

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5.Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Then suppose that trade is initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Freedonia will now be able to consume a maximum of a. 30 units of corn and 30 units of wheat. b. no corn and 30 units of wheat. c. 60 units of corn and 30 units of wheat. d. no corn and 60 units of wheat. 6.Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. For many years the two countries traded, each completely specializing in producing the grain for which it has a comparative advantage. Now, however, war has broken out
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Problem set 1 - Name Recitation Day Recitation Time Problem...

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