1) the marginal rate of transformation equals the absolute slope of a country’s
production possibilities schedule.
a.true
b.false
2) figure 5.2 illustrates the revenue and cost conditions of abc inc. which sells
calculators in canada and france.
figure 5.2. international dumping
consider figure 5.2. with international dumping, abc inc. sells ____ calculators to
canadian buyers at a price of $____ and ____ calculators to french buyers at a price of
$____.
a.15, $4, 12, $7
b.15, $7, 12, $4
c.9, $5, 15, $6
d.9, $6, 15, $5
3) because the ricardian trade theory recognized only how supply conditions influence
international prices, it could determine:
a.the equilibrium terms of trade
b.the outer limits for the terms of trade
c.where a country chooses to locate along its production possibilities curve
d.where a country chooses to locate along its trade triangle
4) the first wave of globalization was brought to an end by
a.the great depression
b.the second world war
c.the first world war
d.the smoot-hawley act
5) which policy reflects the notion that if society enjoys gains due to increased
efficiency stemming from trade liberalization, some sort of compensation should be
provided to those who are temporarily hurt by import competition?
a.countervailing duties
b.trade adjustment assistance
c.domestic subsidies
d.most-favored-nation standard
6) refer to table 10.3. the “net exports” component of the u.s. gross domestic product
registered $-110 billion.
a.true
b.false
7) figure 13.4. canadian economy under a fixed exchange rate system
refer to figure 13.4. starting at equilibrium income $100 billion, where (s – i)0 intersects
(x – m)0, an autonomous increase in canadian investment of $10 billion leads to a $20
billion increase in income and no change in the country’s trade account.
a.true
b.false
8) figure 7.3. world oil market
consider figure 7.3. under competitive conditions, the price of a barrel of oil equals:
a.$7
b.$11
c.$12
d.$16
9) regarding the interests of a nonmember nation of a regional trading agreement:
a.the exporting interests of the nonmember nation outweigh its import competing
interests
b.the import competing interests of the nonmember nation outweigh its exporting
interests
c.the nonmember nation will have a better negotiating position
d.the nonmember nation has no interest in the regional trading arrangement
10) american citizens planning a vacation abroad would welcome:
a.appreciation of the dollar
b.depreciation of the dollar
c.higher wages extended to foreign workers
d.lower wages extended to foreign workers
11) in 1990 the united states and its allies imposed trade embargoes on exports/imports
to/from iraq in response to its invasion of kuwait. the embargoes would induce smaller
losses in iraq’s consumer surplus the:
a.lesser its initial dependence on foreign products
b.less elastic iraq’s demand schedule
c.lesser the available output from alternative suppliers
d.more inelastic iraq’s supply schedule
12) which international organization stipulates procedures for the settlement of
international trade disputes?
a.world trade organization
b.world bank
c.international monetary fund
d.organization of economic development
13) during the past four decades:
a.nontariff barriers (ntbs) and tariffs have increased in importance
b.ntbs and tariffs have decreased in importance
c.ntbs have increased and tariffs have decreased in importance
d.ntbs have decreased and tariffs have increased in importance
14) if japan realizes technological improvements in the production of automobiles,
which lowers its production costs relative to foreign producers, japanese exports will
rise and the yen’s exchange value will appreciate under a system of floating exchange
rates.
a.true
b.false
15) an appreciation of the u.s. dollar tends to:
a.discourage foreigners from making investments in the united states
b.discourage americans from purchasing foreign goods and services
c.increase the number of dollars that could be bought with foreign currencies
d.discourage americans from traveling overseas
16) figure 13.2. australian economy under a fixed exchange rate system
refer to figure 13.2. the slope of the (x-m) schedule and (s-i) schedule indicates that
australia’s foreign trade multiplier is:
a.0.5
b.1.0
c.1.5
d.2.0
17) is it possible to estimate the gains from trade?
18) what is the purchasing power parity approach to exchange rate determination?
19) what is the most important factor which contributes to competitiveness?
20) what are the challenges of the international trading system?
21) what are the challenges of the international trading system?
22) what happens to effective protection when the value added by the domestic
producer declines?
23) in a free market, what determines exchange rates in the long run and the short run?