88.
Award: 1.00 point
89.
Award: 1.00 point
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
For case II, let the international price be 1 bottle = 1 bushel. Derive South Dakota's "trading possibilities curve."
South Dakota
A B C D
Wheet (bushels) 3 3 4 1
Beer (bottles) 4 3 4 2
Option A
Option B
Option C
Option D
References
Multiple Choice Difficulty: 2 Medium
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
For case II, let the international price be 1 bottle = 1 bushel. Derive North Dakota's "trading possibilities curve."
North Dakota
A B C D
Wheat (bushels) 2 3 1 2
Beer (bottles) 4 3 2 2
Option A
Option B
Option C
Option D
References
Multiple Choice Difficulty: 2 Medium
90.
Award: 1.00 point
91.
Award: 1.00 point
The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can
produce when they completely specialize in one or another product. The last two columns give each country's
consumption without trade.
Maximum
beer
production
Maximum
whiskey
production
Beer consumption
without trade
Beer consumption
without trade
Northern Ireland 500 kegs 1500 kegs 300 kegs 600 bottles
Southern Ireland 1200 kegs 800 kegs 600 kegs 400 bottles
What is the price of beer without trade in Southern Ireland?
2 bottles of whiskey = 3 kegs of beer
5 bottles of whiskey = 12 kegs of beer
1 bottle of whiskey = 1 kegs of beer
none of the options
It costs Southern Ireland 0.67 (1200/600) bottles of whiskey to produce one additional keg of beer. Set up a proportion and
solve. 0.67/1 = x/3; x = 2.
References
Multiple Choice Difficulty: 2 Medium
The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can
produce when they completely specialize in one or another product. The last two columns give each country's
consumption without trade.
Maximum
beer
production
Maximum
whiskey
production
Beer consumption
without trade
Beer consumption
without trade
Northern Ireland 500 kegs 1500 kegs 300 kegs 600 bottles
Southern Ireland 1200 kegs 800 kegs 600 kegs 400 bottles
What is the price of beer without trade in Northern Ireland?
2 bottles of whiskey = 3 kegs of beer
5 bottles of whiskey = 12 kegs of beer
2 bottles of whiskey = 1 keg of beer
none of the options
It costs Northern Ireland 2 (600/300) bottles of whiskey to produce one additional keg of beer.
References
Multiple Choice Difficulty: 2 Medium
92.
Award: 1.00 point
93.
Award: 1.00 point
The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can
produce when they completely specialize in one or another product. The last two columns give each country's
consumption without trade.
Maximum
beer
production
Maximum
whiskey
production
Beer consumption
without trade
Beer consumption
without trade
Northern Ireland 500 kegs 1500 kegs 300 kegs 600 bottles
Southern Ireland 1200 kegs 800 kegs 600 kegs 400 bottles
In which product does Northern Ireland have a comparative advantage in producing?
Beer
Whiskey
Neither
Both
It costs Northern Ireland 0.33 (500/1500) kegs of beer to produce one additional unit of whiskey. It costs Southern Ireland
1.5 (1200/800) kegs of beer to produce one bottle of whiskey. Because 0.33 < 1.5, Northern Ireland has the advantage in