Question 4 of 26

According to the 'Parable for the Modern Economy' in Chapter 3, what are the two goods produced by the farmer and the rancher?

What is the primary principle that Chapter 3, 'Interdependence and the Gains from Trade,' aims to examine more closely?

In the example from Figure 1, how many minutes does it take the Farmer to produce 1 ounce of meat?

In the farmer and rancher example, who has an absolute advantage in producing meat?

What is the opportunity cost for the Rancher of producing 1 ounce of potatoes?

The driving force of specialization and the gains from trade is based on which concept?

In the chapter's main parable, who has the comparative advantage in growing potatoes?

According to the principle of comparative advantage, what determines the price at which trade can benefit both parties?

In the 'Should Tom Brady Mow His Own Lawn?' example, what is Tom Brady's opportunity cost of mowing his lawn?

In the example of trade between the U.S. and Japan, Japan has a comparative advantage in producing cars because:

What term refers to goods produced abroad and sold domestically?

Which economist developed the principle of comparative advantage as we know it today, using an example of England and Portugal trading wine and cloth?

If two countries have different opportunity costs of production for two goods, which of the following is true?

Without trade, a country's production possibilities frontier is also its:

Using the data from Figure 1 on page 51, if the Farmer and Rancher both work 8 hours per day and each divides their time equally between meat and potatoes, what is their combined total output of meat?

What is the key benefit of trade described in Chapter 3?

In the chapter's trade proposal, the Farmer produces 32 ounces of potatoes and trades 15 ounces to the Rancher in exchange for 5 ounces of meat. What is the Farmer's final consumption of meat and potatoes?

Why is the production possibilities frontier for the farmer and the rancher a straight line?

If the price of trade for 1 ounce of meat is 5 ounces of potatoes, which party would refuse to trade?

International trade allows a country to have a consumption possibilities frontier that is:

In Adam Smith's example from 'An Inquiry into the Nature and Causes of the Wealth of Nations', why doesn't a tailor make his own shoes?

Using the farmer and rancher data from Figure 1 on page 51, how many ounces of potatoes can the Farmer produce if he works for 8 hours producing only potatoes?

If a country has a comparative advantage in a good, it means that:

When a country allows trade and becomes an exporter of a good, who are the winners and losers domestically?

Based on the trade proposal in Figure 2 on page 53, how do the Farmer's and Rancher's consumption levels change compared to the no-trade scenario?