Question 1

If the relative price of S were to rise,then an individual's indifference curve would rotate toward the T axis.

Accepted Answer

A) True 
 B)False

Question 2

A situation in which a country does not take part in international trade is known as

Accepted Answer

A) autarky. 
B) openness neglect. 
C) indifference tradeoff. 
D) protectionist point. 
A) autarky. 
B) openness neglect. 
C) indifference tradeoff. 
D) protectionist point.

Question 3

Explain why indifference curves have the following properties:
(a) downward slope
(b) convex to the origin
(c) higher curves reflect higher utility
(d) non-intersecting

Accepted Answer

(a) Compensation required for

Question 4

A diagram that shows the maximum amount of one type of good that can be produced in an economy,given the production of the other is known as

Accepted Answer

A) an indifference curve. 
B) the tradeoff schedule. 
C) the production possibility frontier. 
D) the balance of trade. 
A) an indifference curve. 
B) the tradeoff schedule. 
C) the production possibility frontier. 
D) the balance of trade.

Question 5

________ analysis by economists refers to the attempt to answer questions such as what are the effects of a tax on production and consumption decisions.

Accepted Answer

A) Positive 
B) Negative 
C) Normative 
D) Investigative 
A) Positive 
B) Negative 
C) Normative 
D) Investigative

Question 6

What is the difference between positive and normative analysis?

Accepted Answer

Positive analysis refers to the attempt

Question 7

Use national demand and supply curves to show
(a) the incentives for trade to begin between nations.
(b) the effect on the likely pattern of trade of a change in technology in A that causes A's national supply curve to shift out.
(c) the effect on the likely pattern of trade of a change in tastes in B in favor of good S.

Accepted Answer

(a) Trade is likely to occur along the l

Question 8

If a country has a bowed out (concave to the origin)production possibility frontier,then production is said to be subject to

Accepted Answer

A) constant opportunity costs. 
B) decreasing opportunity costs. 
C) first increasing and then decreasing opportunity costs. 
D) increasing opportunity costs. 
A) constant opportunity costs. 
B) decreasing opportunity costs. 
C) first increasing and then decreasing opportunity costs. 
D) increasing opportunity costs.

Question 9

-Refer to the figure above.If the relative price of T were to increase,then the price line would

Accepted Answer

A) shift out in a parallel fashion. 
B) shift in a parallel fashion. 
C) become steeper. 
D) become flatter. 
A) shift out in a parallel fashion. 
B) shift in a parallel fashion. 
C) become steeper. 
D) become flatter.

Question 10

As of 2009,most countries in the world live in autarky.

Accepted Answer

A) True 
 B)False

Question 11

Economists use general equilibrium models of an economy to explain

Accepted Answer

A) consumption levels. 
B) production levels. 
C) relative prices. 
D) All of the above. 
A) consumption levels. 
B) production levels. 
C) relative prices. 
D) All of the above.

Question 12

If country A produces S at a lower relative price than country B,A is said to have a comparative advantage in S.

Accepted Answer

A) True 
 B)False

Question 13

If a country were to experience an increase in its factors of production,its production possibilities frontier would shift outward.

Accepted Answer

A) True 
 B)False

Question 14

If an economy is characterized by increasing opportunity costs,increasing the production of S by constant amounts results in a constant decrease in the production of T.

Accepted Answer

A) True 
 B)False

Question 15

-Refer to the figure above.The relative price of S (in terms of T. is

Accepted Answer

A) 2. 
B) 1/2. 
C) 500. 
D) 1000. 
A) 2. 
B) 1/2. 
C) 500. 
D) 1000.

Question 16

If individuals have money illusion then they

Accepted Answer

A) think that money is worthless. 
B) ignore the effects on their income or wealth of some price changes in the economy. 
C) they base their production and consumption decisions on relative rather than absolute prices. 
D) Both B and C. 
A) think that money is worthless. 
B) ignore the effects on their income or wealth of some price changes in the economy. 
C) they base their production and consumption decisions on relative rather than absolute prices. 
D) Both B and C.

Question 17

In autarky,when a community maximizes its standard of living,its consumption point is

Accepted Answer

A) below the production possibility frontier. 
B) on the production possibility frontier. 
C) above the production possibility frontier. 
D) can't tell without more information. 
A) below the production possibility frontier. 
B) on the production possibility frontier. 
C) above the production possibility frontier. 
D) can't tell without more information.

Question 18

Which of the following is a Nobel Prize winning economist who argued that theories should be tested based on the validity of their predictions?

Accepted Answer

A) Milton Friedman. 
B) Ben Bernanke. 
C) Alan Greenspan. 
D) Larry Summers. 
A) Milton Friedman. 
B) Ben Bernanke. 
C) Alan Greenspan. 
D) Larry Summers.

Question 19

Indifference curves are downward sloping because

Accepted Answer

A) when some of one good is taken away the consumer must be compensated with more of the other. 
B) higher prices mean less quantity demanded. 
C) higher indifference curves mean higher utility. 
D) Both A and B. 
A) when some of one good is taken away the consumer must be compensated with more of the other. 
B) higher prices mean less quantity demanded. 
C) higher indifference curves mean higher utility. 
D) Both A and B.

Question 20

In autarky,when a community maximizes its standard of living,its production point is

Accepted Answer

A) below the production possibility frontier. 
B) on the production possibility frontier. 
C) above the production possibility frontier. 
D) Can't tell without more information. 
A) below the production possibility frontier. 
B) on the production possibility frontier. 
C) above the production possibility frontier. 
D) Can't tell without more information.

If the relative price of S were to rise,then an individual's indifference curve would rotate toward the T axis.

A situation in which a country does not take part in international trade is known as

Explain why indifference curves have the following properties: (a) downward slope (b) convex to the origin (c) higher curves reflect higher utility (d) non-intersecting

A diagram that shows the maximum amount of one type of good that can be produced in an economy,given the production of the other is known as

________ analysis by economists refers to the attempt to answer questions such as what are the effects of a tax on production and consumption decisions.

What is the difference between positive and normative analysis?

If a country has a bowed out (concave to the origin)production possibility frontier,then production is said to be subject to

-Refer to the figure above.If the relative price of T were to increase,then the price line would

As of 2009,most countries in the world live in autarky.

Economists use general equilibrium models of an economy to explain

If country A produces S at a lower relative price than country B,A is said to have a comparative advantage in S.

If a country were to experience an increase in its factors of production,its production possibilities frontier would shift outward.

If an economy is characterized by increasing opportunity costs,increasing the production of S by constant amounts results in a constant decrease in the production of T.

-Refer to the figure above.The relative price of S (in terms of T. is

If individuals have money illusion then they

In autarky,when a community maximizes its standard of living,its consumption point is

Which of the following is a Nobel Prize winning economist who argued that theories should be tested based on the validity of their predictions?

Indifference curves are downward sloping because

In autarky,when a community maximizes its standard of living,its production point is

An Introduction to International Trade

The Classical Model of International Trade

The Heckscher-Ohlin Model

Tests of Trade Models: the Leontief Paradox and Its Aftermath

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Agreements

International Trade and Economic Growth

The Balance of Payments

The Foreign Exchange Market

International Monetary Systems

Exchange Rates in the Short Run

Exchange Rates in the Long Run

Theories of the Current Account Balance

Open Economy Macroeconomics

International Banking, debt and Risk

Filters

Exam 2: Tools of Analysis for International Trade Models

If the relative price of S were to rise,then an individual's indifference curve would rotate toward the T axis.

A situation in which a country does not take part in international trade is known as

Explain why indifference curves have the following properties: (a) downward slope (b) convex to the origin (c) higher curves reflect higher utility (d) non-intersecting

A diagram that shows the maximum amount of one type of good that can be produced in an economy,given the production of the other is known as

________ analysis by economists refers to the attempt to answer questions such as what are the effects of a tax on production and consumption decisions.

What is the difference between positive and normative analysis?

If a country has a bowed out (concave to the origin)production possibility frontier,then production is said to be subject to

-Refer to the figure above.If the relative price of T were to increase,then the price line would

As of 2009,most countries in the world live in autarky.

Economists use general equilibrium models of an economy to explain

If country A produces S at a lower relative price than country B,A is said to have a comparative advantage in S.

If a country were to experience an increase in its factors of production,its production possibilities frontier would shift outward.

If an economy is characterized by increasing opportunity costs,increasing the production of S by constant amounts results in a constant decrease in the production of T.

-Refer to the figure above.The relative price of S (in terms of T. is

If individuals have money illusion then they

In autarky,when a community maximizes its standard of living,its consumption point is

Which of the following is a Nobel Prize winning economist who argued that theories should be tested based on the validity of their predictions?

Indifference curves are downward sloping because

In autarky,when a community maximizes its standard of living,its production point is

An Introduction to International Trade

The Classical Model of International Trade

The Heckscher-Ohlin Model

Tests of Trade Models: the Leontief Paradox and Its Aftermath

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Agreements

International Trade and Economic Growth

The Balance of Payments

The Foreign Exchange Market

International Monetary Systems

Exchange Rates in the Short Run

Exchange Rates in the Long Run

Theories of the Current Account Balance

Open Economy Macroeconomics

International Banking, debt and Risk

Filters