Question 1

Trade allows nations to attain and indifference curve that is

Accepted Answer

A)  beyond the indifference curve it could attain without trade 
B)  inside the indifference curve it could attain without trade 
C)  is positively sloped 
D)  is negatively sloped 
A)  beyond the indifference curve it could attain without trade 
B)  inside the indifference curve it could attain without trade 
C)  is positively sloped 
D)  is negatively sloped A

Question 2

Under which circumstance is it not possible for nations to gain from trade?

Accepted Answer

A)  identical production possibilities and identical tastes and preferences 
B)  different production possibilities and identical tastes and preferences 
C)  identical production possibilities and different tastes and preferences 
D)  different production possibilities and different tastes and preferences 
A)  identical production possibilities and identical tastes and preferences 
B)  different production possibilities and identical tastes and preferences 
C)  identical production possibilities and different tastes and preferences 
D)  different production possibilities and different tastes and preferences A

Question 3

The primary factor for the loss in manufacturing employment in developed nations is

Accepted Answer

A)  Trade 
B)  Investment 
C)  Productivity growth 
D)  Outsourcing 
A)  Trade 
B)  Investment 
C)  Productivity growth 
D)  Outsourcing C

Question 4

What is meant by gains from exchange? How is this shown in the context of production possibilities (PPF)and indifference curves?

Accepted Answer

Gains from exchange in the context of pr

Question 5

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

Accepted Answer

A)  It is given by the absolute slope of the indifference curve 
B)  declines as the nation moves down an indifference curve 
C)  rises as the nation moves up an indifference curve 
D)  all of the above 
A)  It is given by the absolute slope of the indifference curve 
B)  declines as the nation moves down an indifference curve 
C)  rises as the nation moves up an indifference curve 
D)  all of the above

Question 6

Which of the following statements about community indifference curves is true?

Accepted Answer

A)  They are entirely unrelated to individuals' community indifference curves 
B)  they cross, they cannot be used in the analysis 
C)  the problems arising from intersecting community indifference curves can be overcome by the application of the compensation principle 
D)  all of the above. 
A)  They are entirely unrelated to individuals' community indifference curves 
B)  they cross, they cannot be used in the analysis 
C)  the problems arising from intersecting community indifference curves can be overcome by the application of the compensation principle 
D)  all of the above.

Question 7

The gains from exchange with respect to the gains from specialization are always:

Accepted Answer

A)  greater 
B)  smaller 
C)  equal 
D)  we cannot say without additional information 
A)  greater 
B)  smaller 
C)  equal 
D)  we cannot say without additional information

Question 8

If a nation has a steeper indifference curve relative to that of another nation it means that

Accepted Answer

A)  it has stronger tastes and preferences for good Y 
B)  it has stronger tastes and preferences for good X 
C)  it has a higher opportunity costs for good Y 
D)  it has a higher opportunity costs for good X 
A)  it has stronger tastes and preferences for good Y 
B)  it has stronger tastes and preferences for good X 
C)  it has a higher opportunity costs for good Y 
D)  it has a higher opportunity costs for good X

Question 9

Draw a graph for a nation that is assumed to have a comparative advantage in good Y.Suppose that international trade begins,and thus the relative price of X falls (relative price of Y rises).On the graph,show the new equilibrium point and then show the gains from exchange,specialization,and trade,as based on your graph.

Accepted Answer

Answers will vary slightly as based on g

Question 10

International trade statistics show that the United States has a comparative advantage in which of the following goods?

Accepted Answer

A)  Textiles 
B)  Automobiles 
C)  Chemicals 
D)  Agricultural goods 
A)  Textiles 
B)  Automobiles 
C)  Chemicals 
D)  Agricultural goods

Question 11

Community indifference curves:

Accepted Answer

A)  are negatively sloped 
B)  are convex to the origin 
C)  should not cross 
D)  all of the above 
A)  are negatively sloped 
B)  are convex to the origin 
C)  should not cross 
D)  all of the above

Question 12

In a concise and organized essay,explain how and why the manufacturing production of industrialized countries has decreased,even though these countries have a comparative advantage in some manufactured goods.Be sure to include all relevant factors.

Accepted Answer

Answers will vary,but should include the

Question 13

The marginal rate of transformation (MRT)of X for Y refers to:

Accepted Answer

A)  the amount of Y that a nation must give up to produce each additional unit of X 
B)  the opportunity cost of X 
C)  the absolute slope of the production frontier at the point of production 
D)  all of the above 
A)  the amount of Y that a nation must give up to produce each additional unit of X 
B)  the opportunity cost of X 
C)  the absolute slope of the production frontier at the point of production 
D)  all of the above

Question 14

Nation 1's share of the gains from trade will be greater:

Accepted Answer

A)  the greater is nation 1's demand for nation 2's exports 
B)  the closer Px/Py with trade settles to nation 2's pretrade Px/Py 
C)  the weaker is nation 2's demand for nation 1's exports 
D)  the closer Px/Py with trade settles to nation 1's pretrade Px/Py 
A)  the greater is nation 1's demand for nation 2's exports 
B)  the closer Px/Py with trade settles to nation 2's pretrade Px/Py 
C)  the weaker is nation 2's demand for nation 1's exports 
D)  the closer Px/Py with trade settles to nation 1's pretrade Px/Py

Question 15

If the autarky Px/Py is lower in nation 1 than in nation 2 without trade:

Accepted Answer

A)  nation 1 has a comparative advantage in commodity Y 
B)  nation 2 has a comparative advantage in commodity X 
C)  nation 2 has a comparative advantage in commodity Y 
D)  none of the above 
A)  nation 1 has a comparative advantage in commodity Y 
B)  nation 2 has a comparative advantage in commodity X 
C)  nation 2 has a comparative advantage in commodity Y 
D)  none of the above

Question 16

What is the reason for increasing opportunity cost?

Accepted Answer

Heterogeneous inputs.Not all inputs are

Question 17

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

Accepted Answer

A)  It consumes inside its production frontier 
B)  it reaches the highest indifference curve possible with its production frontier 
C)  the indifference curve is tangent to the nation's production frontier 
D)  MRT of X for Y equals MRS of X for Y, and they are equal to Px/Py 
A)  It consumes inside its production frontier 
B)  it reaches the highest indifference curve possible with its production frontier 
C)  the indifference curve is tangent to the nation's production frontier 
D)  MRT of X for Y equals MRS of X for Y, and they are equal to Px/Py

Question 18

Which of the following is a correct statement about deindustrialization in the United States?

Accepted Answer

A)  Most job loss in manufacturing has been due to changes in productivity. 
B)  Most job loss in manufacturing has been due to competition from other countries. 
C)  Most job loss in manufacturing has been due to changes in the legal structure of trade. 
D)  Most job loss in manufacturing has been due to unfair trade practices. 
A)  Most job loss in manufacturing has been due to changes in productivity. 
B)  Most job loss in manufacturing has been due to competition from other countries. 
C)  Most job loss in manufacturing has been due to changes in the legal structure of trade. 
D)  Most job loss in manufacturing has been due to unfair trade practices.

Question 19

With free trade under increasing costs:

Accepted Answer

A)  neither nation will specialize completely in production 
B)  at least one nation will consume above its production frontier 
C)  a small nation will always gain from trade 
D)  all of the above 
A)  neither nation will specialize completely in production 
B)  at least one nation will consume above its production frontier 
C)  a small nation will always gain from trade 
D)  all of the above

Question 20

What is the marginal rate of transformation (MRT)?

Accepted Answer

The MRT of X for Y refers to the amount

Trade allows nations to attain and indifference curve that is

Under which circumstance is it not possible for nations to gain from trade?

The primary factor for the loss in manufacturing employment in developed nations is

What is meant by gains from exchange? How is this shown in the context of production possibilities (PPF)and indifference curves?

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

Which of the following statements about community indifference curves is true?

The gains from exchange with respect to the gains from specialization are always:

If a nation has a steeper indifference curve relative to that of another nation it means that

International trade statistics show that the United States has a comparative advantage in which of the following goods?

Community indifference curves:

In a concise and organized essay,explain how and why the manufacturing production of industrialized countries has decreased,even though these countries have a comparative advantage in some manufactured goods.Be sure to include all relevant factors.

The marginal rate of transformation (MRT)of X for Y refers to:

Nation 1's share of the gains from trade will be greater:

If the autarky Px/Py is lower in nation 1 than in nation 2 without trade:

What is the reason for increasing opportunity cost?

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

Which of the following is a correct statement about deindustrialization in the United States?

With free trade under increasing costs:

What is the marginal rate of transformation (MRT)?

Introduction

The Law of Comparative Advantage

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future Answers to Selected Problems on Web

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Exam 3: The Standard Theory of International Trade

Trade allows nations to attain and indifference curve that is

Under which circumstance is it not possible for nations to gain from trade?

The primary factor for the loss in manufacturing employment in developed nations is

What is meant by gains from exchange? How is this shown in the context of production possibilities (PPF)and indifference curves?

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

Which of the following statements about community indifference curves is true?

The gains from exchange with respect to the gains from specialization are always:

If a nation has a steeper indifference curve relative to that of another nation it means that

International trade statistics show that the United States has a comparative advantage in which of the following goods?

Community indifference curves:

In a concise and organized essay,explain how and why the manufacturing production of industrialized countries has decreased,even though these countries have a comparative advantage in some manufactured goods.Be sure to include all relevant factors.

The marginal rate of transformation (MRT)of X for Y refers to:

Nation 1's share of the gains from trade will be greater:

If the autarky Px/Py is lower in nation 1 than in nation 2 without trade:

What is the reason for increasing opportunity cost?

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

Which of the following is a correct statement about deindustrialization in the United States?

With free trade under increasing costs:

What is the marginal rate of transformation (MRT)?

Introduction

The Law of Comparative Advantage

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future Answers to Selected Problems on Web

Filters