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国际贸易--选择、判断题目

国际贸易--选择、判断题目
国际贸易--选择、判断题目

CHAPTER 2

The Basic Theory Using Demand and Supply

1. The consumer's problem is to maximize: (A)

a. Utility.

b. Profit.

c. Trade.

d. consumption. D P

c

d e b

a

Q Q Q P P 1212Figure 2.3

2. Refer to Figure 2.

3. Consumer surplus associated with Q 1 units is denoted by _______. Consumer surplus associated with Q 2 units is denoted by _______. (C)

a. a+b+d; d+c+e

b. a; b+d

c. a; a+b+d

d. a; d

3. If a 1 percent decrease in the price of a good causes the quantity demanded

of the good to increase by 2 percent, we call that portion of the demand curve: (B)

a. Inelastic.

b. Elasti

c. c. unit elastic.

d. perfectly elastic.

4. Price elasticity of demand is: (B)

a. a measure of the responsiveness of consumers to changes in income.

b. a measure of the responsiveness of consumers to changes in price.

c. the slope of the demand curve.

d. a measure of the amount by which the demand curve shifts as a

result of a change in price.

5. If a 1 percent decrease in the price of a good results in a 0.5% increase

in the quantity demanded of the good, we can conclude that the demand for the good is relatively price: (A)

a. Inelastic.

b. Elasti

c. c. unit elastic.

d. perfectly elastic.

6. The motive of the firm is to: (C)

a. produce as much as possible.

b. maximize the economic

well-being of consumers.

c. maximize profit.

d. minimize costs.

7. Price elasticity of supply is: (B)

a. a measure of the responsiveness of producers to changes in income.

b. a measure of the responsiveness of producers to changes in price.

c. the slope of the supply curve.

d. a measure of the amount by which the supply curve shifts as a result

of a change in price.

8. When the price elasticity of supply is less than 1, we call supply _______.

(B)

a. perfectly elastic

b. Inelastic

c. unit elastic

d. elastic

Figure 2.6

P

S

a

b

Q

Q

x

9. Refer to Figure 2.6. Producer surplus associated with producing and selling

Q x units of the good is the area (A) a.a . b. b. c. a + b.

d. b - a.

10. Producer surplus is: (D)

a. found on a graph as the area under the equilibrium price and above

the supply curve.

b. the net gain in economic well-being associated with producing and

selling the a quantity of a good.

c. used to measure the impact of a change in price on the economic

well-being on producers.

d. all of the abov

e.

11. Buying something in one market and reselling it in another market to

profit from a price difference is called: (C)

a.consumer surplus.

b.producer surplus.

c.arbitrage.

d.one-dollar, one-vote metric.

12.Which of the following says that any dollar of gain or loss will be equally

valued, regardless of who experiences it? (D)

a.consumer surplus.

b. producer surplus.

c. Arbitrage.

d.

one-dollar,one-votemetric.

13.Which of the following is the difference between what consumers and producers either gain or lose from trade? (D)

a. Consumer surplus

b. One-dollar, one-vote metric

c. Arbitrage

d. N et national gains from trade

14.Which of the following statements are true about which country gains more from international trade in a two-country world? (D)

(1)The gains from trade are divided in proportion to the price changes

that trade brings to the two countries.

(2)The country with the steeper trade curve gains more.

(3)The country that experiences the larger price change as a result of

trade has the larger value of net gains from trade.

a.(1) + (2)

b.(1) + (3)

c.(2) + (3)

d.(1) + (2) + (3)

CHAPTER 3-4

Why Everybody Trades: Comparative Advantage and Factor Proportions 1. When Adam Smith presented his theory of absolute advantage, he thought that all value was measured in terms of the amount of _______ used in the production of the good. (B)

a. Land

b. Labor

c. C apital

d. money

2. Labor productivity is: (A、C)

a. the number of units of output that a worker can produce in one hour.

b. the total number of units that all workers in a firm produce in one

day.

c. the number of hours it takes a worker to produce one unit of output.

d. the total number of hours it takes all the workers in a firm to

produce a day’s output.

3. If Britain’s labor productivity in the production of umbrellas is greater than the rest of the world’s labor productivity in umbrellas, we would say that Britain has a(n) _______ in the production of umbrellas. (B)

a. comparative advantage

b. absolute advantage

c. opportunity

cost d. s uperiority

4. In the two-country, two-good model, which of the following is true? (C)

(1) As a result of trade, at least one country is better off and that

country’s gain does not reduce the economic welfare of the other

country.

(2) Both countries can gain from trade by dividing the benefits of the

enhanced global production.

a. (1)

b.(2)

c. Both (1) and (2)

d. Neither (1) nor (2)

5. Constant cost production possibility curves lead to _______

specialization. Increasing cost production possibility curves lead to _______ specialization. (C)

a. no; partial

b. complete;

c.noc. complete; partial

d. partial;

complete

6. Which of the following statements is true about production possibility curves? (A)

(1) Constant cost production possibility curves are straight lines and

lead to complete specialization.

(2) Bowed-out production possibility curves are associated with

partial specialization, but the opportunity cost of producing each

good is constant along the curve.

a. (1)

b. (2)

c. (1) and (2)

d. None of the above

7. Assume that Country X produces two goods—sugar and shoes—and that the country’s production possibility curve is ―bowed-out‖. As the country produces more sugar, (A)

a. the opportunity cost of sugar in terms of shoes foregone will

increase.

b. the opportunity cost of sugar in terms of shoes foregone will

decrease.

c. the opportunity cost of shoes in terms of sugar foregone will

increase.

d. the opportunity cost of sugar in terms of shoes foregone will be the

same.

8. In the two-country, two-good model with an increasing-cost

production-possibility curve, the amount of both goods that are produced in the economy in autarky is determined by: (C)

a.the production-possibility curve.

b. the specialization point.

c. the production-possibility curve and the community indifference curve.

d. the terms of trad

e. 161220P rice =

0.67 bushel

per yard

1 bushel

per yard C loth C 1l 1l 2116T T S 0

S 0S 1S 1

30W heat

C anada 2 bushels

per yard 4812l 2

l 1C 1

C loth P rice =1 bushel per yard 0

810

16W heat R est of the W orld

Figure 3.2

9. Refer to Figure 3.2. Before trade opens, the Rest of the World produces _______ yards of cloth and _______ bushels of wheat; while consuming _______ yards of cloth and _______ bushels of wheat. (D)

a. 10; 8; 8; 10

b. 4; 16; 8; 10

c. 8; 10; 12; 8

d. 8; 10; 8; 10

10. Refer to Figure 3.2. After trade, Canada produces _______ yards of

cloth and _______ bushels of wheat and consumes _______ yards of cloth and _______ bushels of wheat. (A)

a. 20; 3; 12; 11

b. 12; 11; 12; 11

c. 20; 3; 20; 3

d. 16; 6; 12; 11

11. Refer to Figure 3.2. In autarky, the Rest of the W orld produces and

consumes _______ yards of cloth and _______ bushels of wheat. In autarky Canada produces and consumes _______ yards of cloth and _______ bushels of wheat. (B)

a. 8; 10; 20; 3

b. 8; 10; 16; 6

c. 4; 16; 20; 3

d. 12; 8; 12; 11

12. Refer to Figure 3.2. Before trade, the total amount of cloth produced in

the world was _______ yards and the total amount of wheat produced in the world was _______. (B)

a. 24; 19

b. 24; 16

c. 19; 24

d. 16; 24

13. Refer to Figure 3.2. As a result of specialization and trade, cloth

production in the world is increased by _______ yards and wheat production is increased by _______ bushels. (A)

a. 0; 3

b. 0; 0

c. 24; 19

d. 3; 0

14. Which of the following can explain why product prices in two countries

will differ i n a world with no trade? (C)

(1) Production conditions in the two countries are different and

therefore the production-possibility curves in the two countries

are different.

(2) Consumption conditions are different in the two countries and

therefore the community indifference curves in the two countries

are different.

(3) Trade would not be possible because the international price ratio

would be the same in the two countries.

a. (1) + (3)

b. (2)

c. (1) + (2)

d. (1) + (2) + (3)

15. If Country A is labor-abundant and capital-scarce, Country B is

labor-scarce and capital-abundant, Good X is produced in a

labor-intensive process, and Good Y is produced in a capital-intensive

process, we would expect that: (A)

a. Country A would export Good X.

b. Country B would import

Good Y.

c. Country A would import Good X.

d. Country B would import

both Good X and Good Y.

16. A product is relatively _______ if labor costs are a greater proportion

of the product’s value than they are the value of other products.(D)

a. capital-abundant

b. labor-abundant

c. capital-intensive

d.

labor-intensive

17. If Country A has a relatively higher ratio of labor to the other factors of

production than does Country B, then: (A)

a. Country A is labor-abundant.

b. Country A is labor-scarce.

c. Country A is labor-intensive.

d. Country B is labor-intensiv

e.

18. Given the following relationship: (A)

(U.K. land supply) < (Rest of the world’s land supply)

(U.K. labor supply) (Rest of the world’s labor supply)

one can conclude that:

a. the U.K is labor abundant.

b. the U.K. is labor intensive.

c. the Rest of the W orld is labor abundant.

d. the Rest of the W orld

is land intensive.

1 Adam Smith’s theory of absolute advantage relied on the labor theory of value. (T)

2. Mercantilists believed that when one country benefited from international trade it was at the expense of another country or countries. (T)

3. If a country does not have an absolute advantage in the production of a

least one good, then trade will not take place. (F)

4. In Country X, the opportunity cost of producing an additional unit of

Good A is the amount of Good B given up. (T)

5. If Country A is more productive than Country B in the production of

both Good X and Good Y, then economists expect that Country A will

produce everything and export both Good X and Good Y to Country

B. (F)

6. In the two-country, two-good model, both countries can gain from trade

as long as their relative advantages and disadvantages in producing

different goods are different. (T)

7. According to the theory of comparative advantage, countries will

export those goods for which they have a lower opportunity cost and

import those goods for which they have a higher opportunity cost than the rest of the world. (T)

8. The act of buying at a low price in one place and selling at a high price

in another place is called relative pricing. (F)

9. In the two-country, two-good model, international trade will cause the

two national prices that existed in autarky(自给自足的)to move

towards a new worldwide equilibrium price. (T)

10. A nation’s production-possibility curve shows the amounts of

different products that an economy can produce if all of its

resources are fully employed. (T)

11. Straight-line production-possibility curves reflect that the opportunity

cost of producing additional units of each good is constant. (T)

12. Constant-cost production-possibility curves lead to partial specialization.

(F)

13. Increasing-cost production-possibility curves lead to partial specialization. (T)

14. Increasing marginal costs of production arise as a result of the fact that different inputs to production are used in different proportions in the production of different goods. (T)

15. Indifference curves show the various bundles of consumption quantities

that lead to the same level of well-being. (T)

16. Heckscher-Ohlin theory relies upon the factor proportions used in the

production of different goods and differences in the endowments of

different factors in different countries to explain international trade

patterns. (T)

17. If Country A is relatively abundant in labor and Country B is relatively

abundant in capital, Heckscher-Ohlin’s theory predicts th at Country A

will export relatively labor-intensive goods and Country B will export relatively capital-intensive goods. (T)

18. If Country A is relatively land-abundant and Country B is relatively

labor-abundant, Heckscher-Ohlin theory predicts that Country A will

export textiles (a relatively labor-intensive good) and Country B will

export corn (a relatively land-intensive good). (F)

CHAPTER 5

Who Gains and Who Loses from Trade?

1. Heckscher-Ohlin theory predicts that trade occurs because of differences in: (D)

a. the availability of factor inputs to production across countries.

b. the proportions of factor inputs used in the production of different

products.

c. the composition of the work force in a country.

d. both a and b.

2. The theory that predicts that trade occurs because of differences in the

availability of factor inputs across countries and the differences in the

proportions in which the factor inputs are used in producing different

products is called: (B)

a. the Stolper-Samuelson theory.

b. the Heckscher-Ohlin theory.

c. comparative advantage.

d. absolute advantag

e.

3. Trade: (D)

a.occurs because of differences in the availability of factor inputs

across countries and differences in the proportions of those factor

inputs used in producing different products.

b. causes expansion in the export-oriented sector.

c. causes contraction in the import-competing sector.

d. all of the

above.

4. Which of the following is not true about trade? (C)

a. Trade will cause expansion in the export-oriented sector.

B. Trade will cause contraction in the import-competing sector.

c. Trade occurs because of similarities in the availability of factor

inputs across countries and differences in the proportions of

those factors that are used in producing different products.

d. None of the abov

e.

5. In Country X land is relatively abundant and labor is relatively

scarce. In the short-run after trade opens, we expect that: (D)

A. landlords will charge lower rents and farm workers will

earn lower wages.

b. landlords will charge lower rents and farm workers will earn

higher wages.

c. landlords will charge higher rents and farm workers will earn

lower wages.

d. landlords will charge higher rents and farm workers will earn

higher wages.

6. If the domestic country is labor abundant, which of the following

groups will gain in the short-run, but lose in the long-run? (B)

a. domestic landowners in the farming sector.

b. domestic

landowners in the cloth-making sector.

c. foreign landowners in the farming sector.

d. foreign workers

in the cloth-making sector.

7. The Stolper-Samuelson Theorem states that trading that changes the

relative product prices in a country can be expected to: (A)

a. increase the return to the factor used intensively in the production of

the good whose price is rising and decrease the return to the factor used intensively in the production of the good whose price is falling as a

result of trade.

b. decrease the return to the factor used intensively in the production of

the good whose price is rising and decrease the return to the factor

used intensively in the production of the good whose price is falling

as a result of trade.

c. increase the return to the factor used intensively in the production of

the good whose price is rising and increase the return to the factor

used intensively in the production of the good whose price is falling

as a result of trade.

d. decrease the return to the factor used intensively in the production of

the good whose price is rising and increase the return to the factor

used intensively in the production of the good whose price is falling

as a result of trade.

8. The price of each good must equal: (A)

A. its marginal cost. b. the price of each factor of production.

c. the price of the relatively abundant factor of production.

d. the

price of the relatively scarce factor of production.

9. Which of the following predicts that the more concentrated a factor is

in the production of a good, the more likely that factor is to gain or lose from a change in the price of the product? (B)

a. Factor-Price Equalization Theorem

b. Specialized-Factor Pattern

c. Heckscher-Ohlin Theory

d. L eontief Paradox

10. Which of the following predicts that in the long-run following the

opening of trade, labor will earn the same wage in the domestic market and in the foreign market? (A)

a. Factor-Price Equalization Theorem

b. Specialized-Factor Pattern

c. Heckscher-Ohlin Theory

d. L eontief Paradox

11. With free trade, if Country X is relatively land abundant and relatively labor scarce and Country Y is relatively land scarce and relatively labor abundant, the factor-price equalization theorem predicts that: (B)

a. wages will rise in Country X and fall in Country Y until they

equalize.

b. wages will rise in Country Y and fall in Country X until they

equalize.

c. wages will rise in Country X and land rents will fall in Country X

until they equalize.

d. wages will fall in Country X and land rents will rise in Country X

until they equalize.

12. With free trade, if Country X is relatively labor abundant and relatively

land scarce and Country Y is relatively labor scarce and relatively land abundant, the factor-price equalization theorem predicts that: (BC)

A. land rents will rise in Country X and fall in Country Y until

they equalize.

b. land rents will fall in Country X and rise in Country Y until they

equalize.

c. wages will rise in Country X and fall in Country Y until they

equalize.

d. both a and c

13. The factor-price equalization theorem predicts that even without the

migration of factors between countries, free trade will cause: (C)

a. workers with the same skill levels to earn the same wage rate in both

countries.

b. land of comparable quality will earn the same rent in both countries.

c. both a and b.

d. none of the abov

e.

14. The United States is not a net exporter of: (A)

a. Oil.

b. Soybeans.

c. Coal.

d. aircraft.

15.The United States is: (D)

a. relatively abundant in skilled labor.

b. relatively abundant in land.

c. a net exporter of temperate-zone agricultural products.

d. all of the abov

e.

16. The United States is a net importer of: (A)

a. S hoes.

b. temperate-zone agricultural products.

c.Coal.

d.none

of the above.

17. Which of the following is not a product whose trade is consistent with

Heckscher-Ohlin theory? (D)

a. Wheat

b. Aircraft

c. Toys

d. steel

18. Which of the following is an export-oriented factor in the United States?

(D)

a. physical capital

b. mineral rights

c. unskilled labor

d. skilled labor

1. Factor-price equalization theory predicts that the price of labor and land

within a country will equalize. (F)

2. The United States is a net exporter of skilled labor. (T)

3. Trade patterns for steel are consistent with Heckscher-Ohlin theory. (F)

4. In the short-run after trade opens, wages and land rents can be expected to rise in the expanding sector. (F)

5. If Country X is labor abundant, in the long-run after trade opens, wages will rise. (T)

6. If owners of a factor of production gain in the short-run as a result of

free trade, then those owners can be expected to also gain in the

long-run. (F)

7. Free trade can be expected to cause a decrease in the real incomes of

the owners of the factor used intensively in the import-competing

industry. (T)

8. The Stolper-Samuelson Theorem predicts that the real return to the

factor used intensively in the rising-price industry will increase while

the real return to the factor used intensively in the falling-price industry will decrease. (T)

9. The factor-price equalization theorem predicts that, given free trade,

workers will earn the same wage rate in all countries only if there is

migration. (F)

CHAPTER 6

1. Which of the following is two-way trade in which the country both

exports and imports products that are the same or similar? (C)

a. net trade

b. product differentiation trade

c. intra-industry

trade d. internal trade

2. Which of the following is the value of the difference between exports

and imports for a product?(B)

a. product differentiation

b. net trade

c. intra-industry trade

d.

constant returns to trade

3. Which of the following is not an example of intra-industry trade? (C)

a. Europe exports Airbus airplanes and imports Boeing airplanes.

b. Americans export Jeeps and import Jaguars.

c. Japan exports cars and imports oil.

d. America exports films to the rest of the world and imports foreign

films.

4. Which of the following statements about intra-industry trade is accurate? (C)

(1) Intra-industry trade occurs primarily between developed countries.

(2) Intra-industry trade is less prevalent where trade barriers are low.

(3) Intra-industry trade has become more prominent over the last

50 years.

a. (1) + (2)

b. (2) + (3)

c. (1) + (3)

d. (1) + (2) + (3)

5. Which of the following is the formula for the intra-industry trade (IIT)

share? (C)

a. 1 – (Sum of |X – M|)

b. 1 – (Sum of X + M)

c. 1 – (Sum of |X – M|/Sum of X + M)

d. X – M

6. Which of the following refers to the situation that arises when

consumers view products produced in an industry as similar, but not

perfect substitutes for each other? (A)

a. product differentiation

b. net trade

c. intra-industry trade

d.

constant returns to trade

7. Assuming both long-run adjustments of factor inputs and constant

factor input prices, average cost does not change when the quantity of

output changes with _______. (D)

a. internal scale economies

b. external scale economies

c. economies of scale

d. constant returns to scale

8. _______ exist if increasing expenditures on all inputs increases the

output quantity by a larger percentage. (B)

a. Constant returns to scale

b. Economies of scale

c. Product differentiations

d. Monopolies

9. If the expansion of the size of a firm is responsible for a decline in

average cost, then _______ are present. (A)

a. internal scale economies

b. external scale economies

c. product differentiations

d. constant returns to scale

10. When the average cost of the typical firm declines as the output of the

industry within a geographic area increases we call that: (B)

a. internal scale economies

b. external scale economies

c. product differentiations

d. constant returns to scale

11. Which of the following is a market structure in which a large number of

firms compete vigorously with each other in producing and selling

varieties of a basic product? (D)

a. Oligopoly

b. Monopoly

c. product differentiation

d.

monopolistic competition

12. If a global industry is dominated by a few large firms, we call that

market structure: (A)

a. Oligopoly

b. Monopoly

c. product differentiation

d.

monopolistic competition

13. The market structure in which one firm dominates the global industry

for a good is called: (B)

a. Oligopoly

b. Monopoly

c. product differentiation

d.

monopolistic competition

14. An individual firm in a monopolistically competitive market will produce where marginal revenue is _______ the marginal cost and unit cost _______ as the number of varieties in the market increases. (B)

a. greater than; increases

b. equal to; increases

c. less than; decreases

d.greater than; decreases

15. In a monopolistically competitive market, as the number of varieties

increases, the price _______ because the demand for each variety

becomes more _______. (D)

a. increases; elastic

b. decreases; inelastic

c. increases; inelastic

d. decreases; elastic

16. In a monopolitistically competitive market, as the number of

varieties increases, the price _______ and the unit cost _______.

(D)

a. increases; increases

b. increases; decreases

c. decreases;

increases d. decreases; decreases

17. Which of the following is the basis for trade in a monopolistically

competitive market? (B)

a. scale economies

b. product differentiation

c. constant returns to

scale d. net trade

18. Which of the following is not an effect of intra-industry trade with a monopolistically competitive market? (D)

a. There are considerable national gains that arise from trade because

there is an increase in the number of varieties of products available

in the country.

b. There are national gains because the trade results in lower prices on

domestic varieties.

c. Total output of the domestic industry increases as a result of trade.

d. There are few shifts in production between industries that would

affect factor prices.

19. Which of the following statements about economic welfare in an

industry with external economies after the initiation of trade is not

accurate? (A)

a. Consumers in the exporting country lose consumer surplus.

b. Producers in importing countries lose producer surplus.

c. Consumers in the importing country gain consumer surplus.

d. Producers in the exporting country gain producer surplus.

1. Net trade is the value of the difference between exports and imports for

a product. (T)

2. Intra-industry trade is two-way trade in which the country both exports

and imports products that are the same or similar. (T)

3. When consumers view products produced in an industry as similar, but

not perfect substitutes for each other we call that product differentiation.

(T)

4.Monopolistic competition is a market structure with a few large

firms that dominate a global industry. (F)

5. As the number of varieties in a monopolistically competitive market

increase, the price and unit cost increase.(F)

6. Consumers in an exporting country will likely see their consumer

surplus increase as a result of trade if the industry has external scale

economies. (T)

7. The prisoners’ dilemma is likely to arise in a monopolistically

competitive market. (F)

8. Internal scale economies are present if the firm is the basis for the

decline in its average cost. (T)

9. A significant gain from trade in an oligopolistic market results from the

increase in the number of product varieties that trade brings. (F) CHAPTER 7

1. Which of the following statements is true?(A)

(1) Increases in a country’s endowments of land, labor, and capital

will lead to long-run economic growth.

(2) Improvements in the technology used in production can lead to

increases in output, but cannot lead to long-run economic growth.

(3) Increases in technology and increases in the endowments of

productive inputs can both cause the production-possibility curve to shift inward.

a. (1) + (3)

b. (2)

c. (1) + (2)

d. (1) + (2) + (3)

2. Which of the following statements is true?(D)

(1) If a country’s endowment of only one of its productive inputs

increases, production of some products produced in that country

will decline.

(2) An improvement in the productive capacity in a country’s export

sector can make that country either better off or worse off.

(3) Increases in technology and increases in the endowments of

productive inputs can both cause the production-possibility curve to shift outward.

a. (1)

b. (2) + (3)

c. (1) + (2)

d. (1) + (2) + (3) guns guns

guns

guns w ine w ine

w ine w ine G raph A

G raph B G raph C G raph D Figure 6.1

3. Refer to Figure 7.1. Which of the graphs above represents growth

biased towards wine production?(C)

a. A

b. B

c. C

d. D

4. Refer to Figure 7.1. Which of the graphs above represents growth

biased towards guns production?(A)

a. A

b. B

c. C

d. D

5. Which of the following could lead to balanced growth?(A)

(1) Proportionate increases in the endowments of all of a country’s

productive inputs

(2) Technological improvements in the one sector of production

a. (1)

b. (1) + (2)

c.(2)

d. neither (1) nor (2)

6. Given a country that produces wine and guns, which of the following

would not lead to biased growth?(D)

a. A new type of grape is discovered that yields twice as much wine as

the old grapes.

b. The technology used to produce guns improves while the technology

used to produce wine does not change.

c. Due to significant immigration, the number of workers skilled a

producing wine increases while the number of workers skilled at

producing guns does not change.

d. Significant immigration results in great influx of unskilled workers.

It’s equally easy to train workers in the wine industry as in the gun

industry.

7. Which of the following statements is true?(C)

(1) The Rybczynski theory states that in a world with two goods and

constant product prices, an increase in a country’s endowment of

one factor of production with the other factor unchanged results

in an increase in the output of the good that uses the increasing

factor intensively.

(2) The Rybczynski theory states that in a world with two goods and

constant product pric es, an increase in a country’s endowment of

one factor of production with the other factor unchanged results

in a decrease in the output of the good that does not use the

increasing factor intensively.

a. (1)

b. (2)

c. (1) + (2)

d. neither (1) nor (2)

8. Assume a country that produces cloth and coal. Assume that cloth

production requires significant amounts of labor and capital, but

relatively little land. Assume that coal production requires relatively

little labor and capital, but relatively large amounts of coal-rich land.

Given increases in the country’s endowments of capital and labor, we

can expect that:(D)

a. both cloth and coal production will increase.

b.cloth production will increase, but coal production will remain

constant.

c. coal production will increase, but cloth production will remain

constant.

d. cloth production will increase, but coal production will declin

e.

9. Which of the following statements is true?(C)

(1) Development of a newly found natural resource such as oil and

gas can diminish growth of production in other industries.

(2) Significant increases in worker skills and capital can result in a

significant increase in the production of manufactures and can

retard production of natural resources.

(3) Immiserizing growth exists when an increase in production in a

country’s export industry will result in an increase in economic

welfare in that country.

a. (1) + (3)

b. (2) + (3)

c.(1) + (2)

d. (3)

10. Which of the following statements is true?(A)

(1) Growth can lead to an in crease or a decrease in a country’s willingness to trade.

(2) An increase in the size of a country’s trade triangle implies that the country is less willing to trade.

(3) Biased growth and a decrease in a country’s willingness to trade go hand-in-hand.

a. (1)

b. (1) + (2)

c.(1) + (2) + (3)

d. (2) + (3)

11. Which of the following describes the finding that in a two-good world

where product prices are constant, growth in the country’s endowment of one factor of production with the other factor unchanged results in

an increase in the output of the good that uses the growing factor

intensively and a decrease in the output of the other good?(D)

a. Diffusion

b. Dutch disease

c. product cycle hypothesis

d.Rybczynski theorem

12. A large country is defined as a country:(C)

a. that is larger in geographic size than the average member of the United Nations.

b. w hose trade is greater than the trade of the 100 smallest member countries in the United Nations.

c. whose trade can have an impact on the relative international price ration.

d. that is a member of the G-8.

13. When economic growth expands a country’s willingness to trade it can

result in such a large decline in that country’s terms of trade that the

country can be worse off. This is called:(B)

a. Dutch disease

b. immizerizing growth

c. biased growth

d.

diffusion

14. Which of the following conditions is unlikely to be necessary to for immiserizing growth to develop?(C)

a. The country’s growth must be strongly biased toward expanding t he

country’s supply of exports. The increase in exports must be large

enough to have a noticeable impact on world prices.

b. The foreign demand for the country’s exports must be price inelastic

so that an expansion in the country’s export supply leads to a large

drop in the international price of the export product.

c. The country must have a clear absolute and comparative advantage

in producing one good and import all the other goods consumed in

the economy.

d. Before the surge in growth, the country must be heavily engaged in

trade so that the welfare loss from the decline in the terms of trade is

great enough to offset the gains from being able to produce more.

15. The international spread of technology is called:(D)

a. Dutch disease.

b. immizerizing growth.

c. research and

development. d. diffusion.

16. Organized efforts to develop new technology are called:(C)

A. Dutch disease. b. immizerizing growth. c. research and

development. d. diffusion.

17 The product cycle hypothesis was first presented by:(D)

a. Adam Smith.

b. Paul Samuelson

c. Eli Heckscher.

d.

Raymond V ernon.

18. Which of the following explains that the production of a good moves

from invention through the perfection of production methods to

standardization and that the country that initially exports the good

likely becomes the importing country?(C)

a. Dutch disease

b. immizerizing growth

c. product cycle

hypothesis d. diffusion

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