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In class test Sharka - 16
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Questions in this quiz (25)
1The Mercantilists believed:
- AThe international trade was a zero-sum game
- BThat international trade was an n-sum game
- CThat maximising a country's imports would improve its welfare
- DThat exports were detrimental to a country's economy
2The Mercantilists advocated
- ALower labour costs to increase exports
- BTariffs and quotas to reduce imports
- CTrade policies designed to cause an inflow of gold
- DAll of the above
3Specialisation and trade by countries based on absolute advantage results in:
- AA faster depletion of the world's resources
- BProducts produced at higher cost
- CThe world using its resources more efficiently causing an increase in world output
- DThe world using its resources more efficiently causing a decrease in world output
4International trade in a single product:
- AWould tend to lower the price in the exporting country.
- BWould tend to increase the price in the importing country.
- CWould tend to increase the price in the exporting country.
- DWould not affect the price in either country.
5Adam Smith stated that trade was:
- AA zero sum game.
- BTo be controlled by government to maintain a surplus.
- CBeneficial to all countries.
- DBeneficial to large countries that can reduce costs.
6The theory of absolute advantage developed by Adam Smith was based on the assumption that
- ACapital was the only factor of production.
- BLabour was the only factor of production.
- CCapital and labour were the only factors of production.
- DAbsolute advantage was a myth.
7Which of the following economists discovered the basic idea of comparative advantage?
- AJohn Maynard Keynes
- BDavid Ricardo
- CPaul Samuelson
- DMilton Friedman
8If a country has a _____ advantage in the production of a particular good, its opportunity cost of producing that good is lower than the opportunity cost for the trading partner for producing the same good.
- Acomparative
- Babsolute
- Cinterim
- Dmercantilist
9An economy without international trade is an economy in a state of:
- ADisequilibrium
- BEconomic depression
- CAutarky
- DEconomic expansion.
10Which of the following is not one of the dynamic gains from trade?
- AGreater efficiency in the use of resources.
- BLarger gains from trade for small countries.
- CIncreases in the quality of goods.
- DA lower rate of growth of GDP.
11To say that the U.S. possesses a comparative advantage over Japan in the production
of certain types of music implies that (for a similar quality of music) the:- AOpportunity cost of production is less in Japan.
- BAbsolute cost of production is less in the U.S.
- CAbsolute cost of production is less in Japan.
- DOpportunity cost of production is less in the U.S.
12When economists talk about the gains from trade, they mean that:
- ANo one ever gets hurt by trade.
- BThe benefits of trade outweigh the losses.
- CBusiness firms benefit from trade but not necessarily individuals.
- DTrade increases government revenue through taxes on imports.
13If a country has an absolute advantage in two products and has a comparative advantage in only one product, what should it do?
- AProduce both products and export them to maximize its returns.
- BSpecialize in the product it has a comparative advantage in and import the
other. - CProduce both products and export the cheapest and import the most expensive.
- DProduce both products and export the most expensive and import the cheapest.
14Output per unit of Labour
Scooters Picture Frames
Holland 8 2
U.S. 5 2
Based on the information above, if the two countries specialize and trade the U.S. will export _____ and Holland will export _____ .- Ascooters, scooters
- Bscooters, picture frames
- Cpicture frames, scooters
- Dpicture frames, picture frames
15Output per unit of Labour
Scooters Picture Frames.
Holland 8 2.
U.S. 5 2.
With free trade, the minimum limit on the amount paid for one picture frame is _____ scooters.- A0.25
- B0.80
- C2.50
- D4.00
16Which of the following is a viable world price for one scooter?
- A0.8PF
- B2.2PF
- C0.3PF
- D8.5PF
17Answer questions 17 – 20 based on the following information. A worker in the U.S. can produce either 10 chips or 20 sodas per day. A worker in Mexico can produce either 20 chips or 60 sodas per day.
17. Which of the following is true?- AThe U.S. has an absolute advantage in the production of chips.
- BThe U.S. has a comparative advantage in the production of sodas.
- CThe U.S. has an absolute advantage in the production of sodas.
- DThe U.S. has a comparative advantage in the production of chips.
18Answer questions 17 – 20 based on the following information. A worker in the U.S. can produce either 10 chips or 20 sodas per day. A worker in Mexico can produce either 20 chips or 60 sodas per day
Which of the following is false?- AMexico has an absolute disadvantage in the production of chips.
- BMexico has a comparative advantage in the production of sodas
- CMexico has an absolute advantage in the production of chips.
- DMexico has a comparative disadvantage in the production of chips.
19Answer questions 17 – 20 based on the following information. A worker in the U.S. can produce either 10 chips or 20 sodas per day. A worker in Mexico can produce either 20 chips or 60 sodas per day.
Which of the following is true?- AThe cost of chips in terms of sodas in the U.S. is 1C=3S.
- BThe cost of chips in terms of sodas in the U.S. is 1/3C=1S.
- CThe cost of chips in terms of sodas in Mexico is 1C=2S.
- DThe cost of chips in terms of sodas in the U.S. is 1C=2S.
20Answer questions 17 – 20 based on the following information. A worker in the U.S. can produce either 10 chips or 20 sodas per day. A worker in Mexico can produce either 20 chips or 60 sodas per day.
Which of the following would be the best ratio for Mexico in terms of the gains from trade?- A1C = 2.1S
- B1C = 2.3S
- C1C = 2.5S
- D1C = 2.7S
21The concept of reciprocal demand suggests that:
- AThe country with the greater demand for the other country’s product will gain
more from trade. - BThe country with the greater demand for the other country’s product will gain
less from trade. - CThat the demand for another country’s product does not influence the terms of
trade. - DThat the terms of trade will dictate the amount of debt the country will acquire
to purchase the product.
- AThe country with the greater demand for the other country’s product will gain
22The terms of trade is given by:
- AThe prices paid for all imports.
- BThe prices received for all exports.
- CThe price paid for all domestically produced goods.
- DThe prices received for exports and paid for imports.
23When a production possibilities frontier is a straight line, production occurs under conditions of:
- AConstant costs.
- BIncreasing costs.
- CDecreasing costs.
- DNone of the above.
24A point on a country’s production possibilities frontier indicates:
- AA level of production that would cause unemployment.
- BA level of production that is unattainable.
- CAn undesirable level of production.
- DA level of production where resources are fully employed.
25The slope of a country’s production possibilities frontier is called:
- AThe marginal rate of expansion.
- BThe marginal rate of substitution.
- CThe marginal rate of transformation.
- DThe marginal benefits of trade.
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- Quiz on In class test Sharka, created by Emma Kolarova on 13/03/2018.
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- Emma Kolarova
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- English
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