Econ 245 test 1
An increase in a nations terms of trade will A) increase the nations gains from trade B) reduce the nations gains from trade C) make other nations better of D) make the nation worse off
A)
If a nations opportunity cost of producing one unit of X is 1 unit of Y, and the world equilibrium price ration is (Px/Py)= 2, then the nation will A) specialize in and export good X B) specialize in and export good y C) not trade at all D) import good X
A)
If in autarky a nation is producing at a point on its PPF where the slope of PPF (=OC of X) is greater that the slope of CIC, then the nation should, A) produce less X and more Y B) produce more X and less Y C) produce more X and Y D) produce less X and Y
A)
In the terms of trade in a nation increase in a two nation world, then those of its trade partner A) deteriorate B) improve C) remain unchanged D) any of the above
A)
International trade is similar to interregional trade in that both must overcome A) distance and space B) trade restrictions C) differences in currency D) differences in monetary systems
A) distance and space
Over time, the economic interdependence of nations has A) grown B) diminished C) remained the same D) cannot say
A) grown
The wage rate in nation H is $4 per laborer and output per laborer in nation H is 8 units of cheese. The wage rate in nation L is $1 per laborer and output per laborer in nation L is 1 unit of cheese. Which of the following must be true at these wage rates and productivity level? A) nation L will out compete nation H in the production of cheese B) the price of cheese in nation H will be $0.50 and the price of cheese in nation L will be $1 C) the price of cheese in nation H will be $2 and the price of cheese in nation L will be $1 D) as a result of its lower wage rate, nation L must have an AA in cheese
B)
With reference to the statement above, if 3X is exchanged for 3Y A) nation A gains 2X B) nation B gains 6Y C) nation A gains 3Y D) nation B gains 3Y
B)
Based on the index of openness (or interdependence) international trade is most important to the standard of living of A) the US B) Switzerland C) Germany D) England
B) Switzerland
A concave (or bowed out) PPF indicates increasing OC in the production of A) commodity X only B) commodity Y only C) both commodities D) neither commodities
C)
If with one hour of labor time nation A can produce either 3X or 3Y wile nation B can produce either 1X or 3Y (and labor is the only input), then A) nation A has comparative disadvantage in commodity X B) nation B has comparative disadvantage in commodity Y C) nation A has CA in commodity X D) nation A has CA in neither commodity
C)
Mutually beneficial trade cannot occur if two nations have A) identical PPF only B) identical CIC only C) identical PPF and CIC D) identical GDP only
C)
Which of the following best characterizes the effect of trade? A) the PPF of at least one nation must shift in B) one nation can gain only if another loses C) all nations can consume outside its PPF D) nations move to a preferred position on the PPF
C)
With reference to the statement above, the range of mutually beneficial trade between nation A and B is A) 3Y<3X<5Y B) 5Y<3X<9Y C)3Y<3X<9Y D)1Y<3X<3Y
C)
Imports will most likely A) increase the cost of living B) limit the variety of goods available to domestic consumers C) increase competition to import-competing firms D) compromise the quality of domestic goods
C) increase competition to import-competing firms
Which of the following statements about globalization is false? A) it increases economic efficiency B) it cannot he avoided C) it benefits all people D) none of the above
C) it benefits all people
Which of the following is not the subject matter of international finance? A) foreign exchange markets B) the balance of payments C) the basis and the gains from trade D) policies to adjust balance of payments disequilibria
C) the basis and the gains from trade
If in a two nation (A and B), two commodity (X and Y) world, it is established that nation A has a CA in commodity X and then nation B must have A) an AA in Y B) an AD in X C) a CD in Y D) a CA in Y
D)
In nation 1 the OC of producing 1 unit of soup is 4 units of nuts. In nation 2 the OC of producing 1 unit of soup is 1 nut. The range for mutually beneficial trade price (in terms of relative price of soup to nut Ps/Pn) is A) 1<Ps/Pn<2 B) 1/4<Ps/Pn<1 C) 1/2<Ps/Pn<1 D) 1<Ps/Pn<4
D)
Mercantilist recommend trade policies intended to produce which of the following? A) specialization according to absolute advantage B) specialization according to comparative advantage C) an export deficit D) a gold inflow or trade surplus
D) a gold inflow or trade surplus
International economics deals with A) the flow of goods, services and payments among nations B) policies directed at regulating the flow of goods, services and payments C) the effects of policies affecting international trade and finance on the welfare of the nation D) all of the above
D) all of the above
The anti-globalization movement blames globalization for A) increasing income equalities in the world B) child labor C) environmental pollution D) all of the above
D) all of the above
If nation 1 can produce twice as many autos per laborer as nation 2, and nation 2 can produce one half as many DVD players per laborer as nation 1, then A) the OC of producing DVD players is lower in nation 2 B) the OC of producing autos is higher in nation 1 C) nation 2 must have AA in DVD players D) neither nation has CA in DVD players
D) neither nation has CA in DVD players
Which of the following is not a characteristic of a set of community indifference curves (CICs)? A) they may intersect B) they are downward sloping C) the slope of a CIC changes as consumption changes D) they indicate preferred combinations of goods
A)
With reference to the statement above, before trade A) Px/Py = 1 in nation A B) Px/Py = 3 in nation B C) Py/Px = 1/3 in nation B D) all of the above are correct
D)
