IEP Midterm 1

the criticism of the anti-globalization movement is

is only partly correct

Which of the following statements about globalization is false

it benefits all people

if only the supply of labor increases in a nation, the nation's production frontier shifts

more along the axis measuring the L-intensive commodity

according to the Stopler-Samuelson theorem, international trade leads to

reduction in the real income of the nation's relatively scarce factor

international trade was an engine of growth for the

regions of recent settlements during the 19th century

at a relative commodity price above equilibrium

the commodity price will fall

Ricardo explained the law of comparative advantage on the basis of

the labor theory of value

international trade is most important to the standard of living of

Switzerland

international trade is similar to interregional trade is that both must overcome

distance and space

which is not an advantage of export-proeinted industrialization

domestic industries grow accustomed to protection and have an incentive to become more efficient

International trade theory refers to

the microeconomic aspects of international trade

trasport costs

all of the above

Immizerising growth refers to a

decrease in the welfare of a nation with growth

The mercantilists did not advocate

free trade

Economic interdependence is greater for

small nations

The Ricardian trade model has been empirically

verified

with reference to the statement of Q6, the range of mutually beneficial trade between nation A and B is:

3Y<3X<9Y

If in a two-nation, two-commodity world, it is established that nation A has a comparative advantage in commodity X, then nation B must have

a comparative advantage in commodity Y

International economics deals with

all of the above

a deterioration of a nation's terms of trade causes the nation's welfare to

any of the above

from empirical studies, we conclude that the H-O theory

can generally be accepted

which of the following products are not produced at all in the United States

coffee, tea, cocoa

the commodity in which the nation has the smallest absolute disadvantage is the commodity of its

comparative advantage

if the terms of trade increase in a two-nation world, those of the trade partnerL

deteriorate

Over time, the economic interdependence of nations has

grown

an increase in the dollar price of a foreign currency usually

benefits US exporters

which of the following is not true for a nation that is in equilibrium in isolation

it consumes inside its production frontier

which of the following is not the subject matter of international finance

the basis and the gains from trade

Mutually beneficial trade cannot occur if production frontiers are

the same and tastes are also the same

In the trade between a small and a large nation

the small nation is likely to receive all of the gains from trade

Q6 If with one hour of labor time nation A can produce either 3X or 3Y while nation B can produce either 1X or 3Y

Nation A has a comparative advantage in commodity X

according to Adam Smith, international trade was based on

absolute advantage

A difference in relative commodity prices between two nations can be based upon a difference in

all of the above

If actual Px/Py exceeds the equilibrium relative Px/Py with trade

all of the above

If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B

all of the above

The marginal rate of transformation of X for Y refers to:

all of the above

Which of the following statements is true with respect to the MRS of X or Y

all of the above

With free trade under increasing costs

all of the above

With reference to the statement in Q6

all of the above

a difference in relative commodity prices between nations can be based on a difference in

all of the above

a great deal of international trade

all of the above

according to traditional trade theory, a developing nation should esport the commodity

all of the above

community indifference curves

all of the above

international trade can be based on economies of scale even if both nations have identical

all of the above

perfect international mobility of factors of production

all of the above

the anti-globalization movement blames globalization for

all of the above

trade cannot be an engine of growth for todays' developing nations because

all of the above

what is the advantage of a policy of import substitution

all of the above

while of the following statements is true with regard to the product-cycle theory

all of the above

the marginal rate of substitution of X for Y in consumption refers to theL

amount of Y that a nation must give up for one extra unit of X and still remain on the same indifference curve

if the price of a nation's exports and imports both rise, the nation's commodity terms of trade

any of the above

The H-O model extends the classical trade model by

both

A production frontier that is concave indicates that the nation incurs increasing opportunity costs in the production of

both commodities

According too the H-O theory, trade reduces international different in

both commodity and factor prices

in the H-O model, international trade is based mostly on a difference in

factor endowments

those nations that liberalized trade during the past decade

grew faster than those that did not

which of the follow is false with regard to the specific factors theorem, international trade

harms the immobile factors that are specific to the nation's export commodities or sectors

The Leontif paradox refers to the empirical finding that US

import substitutes were more K-intensive than exports

intra-industry trade takes place

in order to take advantage of economies of scale

the nations commodity terms of trade times the quantity index of its export sector gives the nation's

income terms of trade

developing nations often experience wildly fluctuating export prices for their primary products because of

inelastic and unstable demand and supply

Which of the following statements with regard to international economics is true

it is a relatively old field

the policy of import substitution was most vigorously followed by

large developing nations during the 1960s

a nation is said to have an relative abundance of K if it has a

lower price of K in relation to the price of L

the opening or expansion of international trade usually affects all member of society

most positively but some negatively

If the internal Px/Py is lower in nation 1 than in nation without trade:

nation 2 has a comparative advantage in commodity Y

with reference to the statement in Q6, if 3X is exchanged for 3Y

nation B gains 6Y

empirical studies have found that, in general, the export instability faced by developing nations was

not very large and did not seriously interfere with development

which of the following is not part of the demand for a NIEO

preferential access for the manufactured exports of developed nations

The Ricardian model was tested empirically in terms of difference in

relative labor productivities and costs in carious industries among nations

When a nation's commodity terms of trade deteriorate and its income terms of trade improve, the nation's welfare

rises

What proportion of international trade is based on absolute advantage

some

Which of the following is not a reason for increasing opportunity cost

technology differs among nations

which of the following statements is true

the price of the nation's import commodity will fall as a result of international trade

a rough measure of the degree of economic interdependence of a nation is given by

the ratio of a nation's imports and exports to it GDP