1) a tariff placed upon a product in order to offset a foreign export subsidy is called
a. an antidumping duty
b. a countervailing duty
c. a predatory duty
d. a specific duty
2) which one of the following has not been offered as a reason for increased wage
inequality in the united states in recent decades?
a. the increased adoption by firms of skill-biased technological change
b. an increase in the strength of labor unions
c. a decline in the real minimum wage
d. increased imports of labor-intensive goods from developing countries
3) the situation where international trade occurs because various stages in the
production process of a good are occurring in different countries is known as
a. vertical specialization-based trade
b. intra-industry trade
c. dumping or international price discrimination
d. gravity model-type trade
4) in the case of the economists definition of dumping, an exporting firm is selling its
product at a __________ price in the importing country than in the exporters home
country, and this suggests that demand for the exporters product is __________ in the
exporting country than in the importing country.
a. higher; more elastic
b. higher; less elastic
c. lower; less elastic
d. lower; more elastic
5) if a french citizen places $100,000 in an italian bank and an italian citizen places
$40,000 in a french bank, international bank lending has increased by __________.
a. $40,000
b. $60,000
c. $100,000
d. $140,000
6) (this question pertains to material in appendix a.)
given the convex to-the-origin production-possibilities frontier (ppf):
suppose that we envision a very slight movement of production away from the
equilibrium point e toward point f (with unchanged goods prices). if this movement
takes place, (px/py) will be __________ (mcx/mcy), and production will thus move
__________.
a. less than; back to point e
b. less than; further away from point e
c. greater than; back to point e
d. greater than; further away from point e
7) in the following edgeworth box diagram for a countrys production,
a. point t has greater output of the a good than does point r
b. output of the a good is greater at point s as at point r
c. a plotting of the output combinations along the diagonal results in the production-
possibilities frontier for this country
d. good a is the relatively labor-intensive good and good b is the relatively capital-
intensive good
8) given the following payoff matrix for two interdependent firms in duopoly, where the
figure in the lower left of each box shows firm h’s profit and the figure in the upper
right of each box shows firm f’s profit:
starting from the payoff matrix situation above, suppose that a subsidy of $40 is now
given to firm h. other things equal, with this subsidy, firm h will __________.
a. always produce
b. never produce
c. only produce if firm f does not produce
d. only produce if firm f produces
9) growth of the scarce factor in the large-country case will, other things equal,
a. always expand trade and improve the terms of trade
b. expand both exports and imports and lead to an improvement in the terms of trade
c. result in a protrade production effect and a deterioration in the terms of trade
d. result in an ultra-antitrade production effect and an improvement in the terms of trade
10) in adam smiths view, international trade
a. benefited both trading countries
b. was based on absolute cost differences
c. reflected the resource base of the countries in question
d. all of the above
11) in a production-possibilities/indifference curve diagram, when a (small) country
moves from a situation of free trade to a situation of a uniform ad valorem tariff on
imports from all trading partners, the ratio of the domestic price of the countrys export
good to the domestic price of the countrys import good __________.
a. will increase
b. will not change
c. will decrease
d. will increase, not change, or decrease cannot be determined without more
information
12) given the following ricardo-type table shows the labor input required per unit of
output in each of the two industries in each of the two countries:
which one of the following statements is true?
a. the united kingdom has an absolute advantage in both goods and a comparative
advantage in cloth
b. the pretrade price ratio in the united kingdom is 1 steel:2 cloth
c. the united kingdom has an absolute advantage in neither good but a comparative
advantage in steel
d. the pretrade price ratio in germany is 1 cloth:1.5 steel
13) in a heckscher-ohlin context, other things equal, growth of the relatively-abundant
factor of production in a country that is a large country will lead to __________
willingness to trade and to __________ in the countrys terms of trade.
a. an increased willingness; a deterioration
b. an increased willingness; an improvement
c. a decreased willingness; a deterioration
d. a decreased willingness; an improvement
14) which one of the following is not an assumption contained in the classical/ricardo
trade model?
a. factors of production (labor) are completely mobile within a country
b. factors of production (labor) are completely mobile between countries
c. marginal costs are constant as production increases for a firm/industry
d. transportation costs of goods between countries are zero