1) Approximately what percent of all world production of goods and services is exported to other countries? A) 10% B) 30% C) 50% D) 100% E) 90% 2) The gravity model offers a logical explanation for the fact that A) trade between Asia and the U.S. has grown faster than NAFTA trade. B) trade in services has grown faster than trade in goods. C) trade in manufactures has grown faster than in agricultural products. D) Intra-European Union trade exceeds international trade by the European Union. E) the U.S. trades more with Western Europe than it does with Canada. 3) The gravity model suggests that over time A) trade between neighboring countries will increase. B) trade between all countries will increase. C) world trade will eventually be swallowed by a black hole. D) trade between Earth and other planets will become important. E) the value of trade between two countries will be proportional to the product of the two countries'''' GDP. 4) The gravity model explains why A) trade between Sweden and Germany exceeds that between Sweden and Spain. B) countries with oil reserves tend to export oil. C) capital rich countries export capital intensive products. D) intra-industry trade is relatively more important than other forms of trade between neighboring countries. E) European countries rely most often on natural resources.
Trang 1THƯƠNG MẠI QUỐC TẾ1) Approximately what percent of all world production of goods and services
is exported to other countries?
2) The gravity model offers a logical explanation for the fact that
A) trade between Asia and the U.S has grown faster than NAFTA trade
B) trade in services has grown faster than trade in goods
C) trade in manufactures has grown faster than in agricultural products
D) Intra-European Union trade exceeds international trade by the European
Union.
E) the U.S trades more with Western Europe than it does with Canada
3) The gravity model suggests that over time
A) trade between neighboring countries will increase
B) trade between all countries will increase
C) world trade will eventually be swallowed by a black hole
D) trade between Earth and other planets will become important
E) the value of trade between two countries will be proportional to the
product of the two countries' GDP.
4) The gravity model explains why
A) trade between Sweden and Germany exceeds that between Sweden and
Spain.
B) countries with oil reserves tend to export oil
C) capital rich countries export capital intensive products
D) intra-industry trade is relatively more important than other forms of trade
between neighboring countries
E) European countries rely most often on natural resources
5) According to the gravity model, a characteristic that tends to affect the
probability of trade existing between any two countries is
A) their cultural affinity
B) the average weight/value of their traded goods
C) their colonial-historical ties
D) the distance between them.
E) the number of different product varieties produced by their industries
6) In general, which of the following do NOT tend to increase trade between
two countries?
A) linguistic and/or cultural affinity
B) historical ties
C) larger economiesD) mutual membership in preferential trade agreements
E) the existence of well controlled borders between countries 7) Why does the gravity model work?
A) Large economies became large because they were engaged in internationaltrade
B) Large economies have relatively large incomes, and hence spend more ongovernment promotion of trade and investment
C) Large economies have relatively larger areas which raises the probability that aproductive activity will take place within the borders of that country
D) Large economies tend to have large incomes and tend to spend more on imports.
E) Large economies tend to avoid trading with small economies
8) We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries.
A) This is explained by the gravity model, since these are all large countries.B) This is explained by the gravity model, since these are all small countries
C) This fails to be consistent with the gravity model, since these are small countries.
D) This fails to be consistent with the gravity model, since these are largecountries
E) This is explained by the gravity model, since they do not share borders
9) The two neighbors of the United States do a lot more trade with the United States than European economies of equal size.
A) This contradicts predictions from gravity models
B) This is consistent with predictions from gravity models.
C) This is irrelevant to any inferences that may be drawn from gravity models.D) This is because these neighboring countries have exceptionally large GDPs.E) This relates to Belgium's trade record with the U.S
10) Since the period following World War II (the early 1950s), the proportion
of most countries' production being used in some other country
A) remained constant
B) increased.
C) decreased
D) fluctuated widely with no clear trend
E) increased slightly before dropping off
11) Since World War II, the likelihood that foreign markets would gain importance to average exporters as a source of profits has
A) remained constant
B) increased.
C) decreased
Trang 2D) fluctuated widely with no clear trend.
E) increased slightly before dropping off
12) Since World War II, the likelihood that any single item in the typical
consumption basket of a consumer in the U.S originated outside of the U.S.
A) remained constant
B) increased.
C) decreased
D) fluctuated widely with no clear trend
E) increased slightly before dropping off
13) Since World War II, the likelihood that the job of a new college graduate
will be directly or indirectly affected by world trade
A) remained constant
B) increased.
C) decreased
D) fluctuated widely with no clear trend
E) increased slightly before dropping off
14) Since World War II, the relative importance of raw materials, including
oil, in total world trade
A) remained constant
B) increased
C) decreased.
D) fluctuated widely with no clear trend
E) increased slightly before dropping off
15) In the current Post-Industrial economy, international trade in services
(including banking and financial services)
A) dominates world trade
B) does not exist
C) is an increasingly important component of global trade.
D) is relatively stagnant
E) far surpasses the predictions of economist Alan Blinder
16) In the pre-World War I period, the U.S exported mainly
A) manufactured goods
B) services
C) primary products including agricultural.
D) technology intensive products
E) weapons
17) In the pre-World War I period, the United Kingdom exported mainly
A) manufactured goods.
B) services
C) primary products including agricultural
D) technology intensive products
E) livestock
18) In the pre-World War I period, the United Kingdom imported mainly
A) manufactured goods
B) services
C) primary products including agricultural.
D) technology intensive products
E) from the United States
19) In the present, most of the exports from China are A) manufactured goods.
B) services
C) primary products including agricultural
D) technology intensive products
E) overpriced by world market standards
20) Which of the following does NOT explain the extent of trade between Ireland and the U.S.?
A) historical tiesB) cultural Linguistic ties
C) Gravity Model
D) multinational corporationsE) large numbers of Irish-Americans
21) Trade between two countries can benefit both countries if A) each country exports that good in which it has a comparative advantage.
B) each country enjoys superior terms of trade
C) each country has a more elastic demand for the imported goods
D) each country has a more elastic supply for the exported goods
E) each country produces a wide range of goods for export
22) In order to know whether a country has a comparative advantage in the production of one particular product we need information on at least unit labor requirements
A) oneB) twoC) three
D) four
E) five
23) A country engaging in trade according to the principles of comparative advantage gains from trade because it
A) is producing exports indirectly more efficiently than it could alternatively
B) is producing imports indirectly more efficiently than it could domestically.
C) is producing exports using fewer labor units
Trang 3D) is producing imports indirectly using fewer labor units.
E) is producing exports while outsourcing services
24) Given the information in the table above, if it is ascertained that Foreign
uses prison-slave labor to produce its exports, then home should
A) export cloth.
B) export widgets
C) export both and import nothing
D) export and import nothing
E) export widgets and import cloth
25) Given the information in the table above, if the Home economy suffered a
meltdown, and the Unit Labor Requirements doubled to 20 for cloth and 40
for widgets then home should
A) export cloth.
B) export widgets
C) export both and import nothing
D) export and import nothing
E) export widgets and import cloth
26) The earliest statement of the principle of comparative advantage is
27) The Ricardian model attributes the gains from trade associated with the
principle of comparative advantage result to
A) differences in technology
B) differences in preferences
C) differences in labor productivity.
D) differences in resources
E) gravity relationships among countries
28) The Ricardian model demonstrates that
A) trade between two countries will benefit both countries
B) trade between two countries may benefit both regardless of which good each
exports
C) trade between two countries may benefit both if each exports the product
in which it has a comparative advantage.
D) trade between two countries may benefit one but harm the other
E) trade between two countries always benefits the country with a larger laborforce
29) Given the information in the table above
A) neither country has a comparative advantage in cloth
B) Home has a comparative advantage in cloth.
C) Foreign has a comparative advantage in cloth
D) Home has a comparative advantage in both cloth and widgets
E) neither country has a comparative advantage in widgets
30) Given the information in the table above, if wages were to double in Home, then Home should
A) export cloth.
B) export widgets
C) export both and import nothing
D) export and import nothing
E) export widgets and import cloth
31) Given the information in the table above
A) neither country has a comparative advantage in cloth
B) Home has a comparative advantage in widgets
C) Foreign has a comparative advantage in widgets.
D) Home has a comparative advantage in both cloth and widgets
E) neither country has a comparative advantage in widgets
32) Given the information in the table above, Home's opportunity cost of cloth is
Trang 436) Given the information in the table above, if the world equilibrium price of
widgets were 4 cloth, then
A) both countries could benefit from trade with each other.
B) neither country could benefit from trade with each other
C) each country will want to export the good in which it enjoys comparative
advantage
D) neither country will want to export the good in which it enjoys comparative
advantage
E) both countries will want to specialize in cloth
37) Given the information in the table above, if the world equilibrium price of
widgets were 40 cloths, then
A) both countries could benefit from trade with each other.
B) neither country could benefit from trade with each other
C) each country will want to export the good in which it enjoys comparative
advantage
D) neither country will want to export the good in which it enjoys comparative
advantage
E) both countries will want to specialize in cloth
38) In a two product two country world, international trade can lead to
increases in
A) consumer welfare only if output of both products is increased
B) output of both products and consumer welfare in both countries.
C) total production of both products but not consumer welfare in both countries
D) consumer welfare in both countries but not total production of both products
E) prices of both goods in both countries
39) As a result of trade, specialization in the Ricardian model tends to be
A) complete with constant costs and with increasing costs
B) complete with constant costs and incomplete with increasing costs.
C) incomplete with constant costs and complete with increasing costs
D) incomplete with constant costs and incomplete with increasing costs
E) dependent on the specific opportunity costs involved in production
40) As a result of trade between two countries which are of completely different economic sizes, specialization in the Ricardian 2X2 model tends to
A) be incomplete in both countries
B) be complete in both countries
C) be complete in the small country but incomplete in the large country.
D) be complete in the large country but incomplete in the small country
E) sustain one countries economy in in direct proportion to the other
41) A nation engaging in trade according to the Ricardian model will find its consumption bundle
A) inside its production possibilities frontier
B) on its production possibilities frontier
C) outside its production possibilities frontier.
D) inside its trade-partner's production possibilities frontier
E) on its trade-partner's production possibilities frontier
42) In the Ricardian model, if a country's trade is restricted, this will cause all EXCEPT which?
A) limited specialization and the division of laborB) reduced volume of trade and reduced gains from trade
C) nations to produce inside their production possibilities curves
D) a country to produce some of the product of its comparative disadvantageE) raised costs as more diverse product is produced internally
43) If a very small country trades with a very large country according to the Ricardian model, then
A) the small country will suffer a decrease in economic welfare
B) the large country will suffer a decrease in economic welfare
C) the small country only will enjoy gains from trade.
D) the large country will enjoy gains from trade
E) both countries will enjoy equal gains from trade
44) If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then
A) country H but not country F will gain from trade
B) country H and country F will both gain from trade.
C) neither country H nor F will gain from trade
D) only the country whose government subsidizes its exports will gain
E) country F but not country H will gain from trade
Trang 545) If the world terms of trade equal those of country F, then
A) country H but not country F will gain from trade.
B) country H and country F will both gain from trade
C) neither country H nor F will gain from trade
D) only the country whose government subsidizes its exports will gain
E) country F but not country H will gain from trade
46) If the world terms of trade equal those of country H, then
A) country H but not country F will gain from trade
B) country H and country F will both gain from trade
C) neither country H nor F will gain from trade
D) only the country whose government subsidizes its exports will gain
E) country F but not country H will gain from trade.
47) According to Ricardo, a country will have a comparative advantage in the
product in which its
A) labor productivity is relatively low
B) labor productivity is relatively high.
C) labor mobility is relatively low
D) labor mobility is relatively high
E) labor is outsourced to neighboring countries
48) Assume that labor is the only factor of production and that wages in the
United States equal $20 per hour while wages in Japan are $10 per hour.
Production costs would be lower in the United States as compared to Japan if
A) U.S labor productivity equaled 40 units per hour and Japan's 15 units per
hour.
B) U.S labor productivity equaled 30 units per hour and Japan's 20 units per hour
C) U.S labor productivity equaled 20 units per hour and Japan's 30 units per hour
D) U.S labor productivity equaled 15 units per hour and Japan's 25 units per hour
E) U.S labor productivity equaled 15 units per hour and Japan's 40 units per hour
49) If two countries engage in Free Trade following the principles of
comparative advantage, then
A) neither relative prices nor relative marginal costs (marginal rates of
transformation-MRTs) in one country will equal those in the other country
B) both relative prices and MRTs will become equal in both countries
C) relative prices but not MRTs will become equal in both countries.
D) MRTs but not relative prices will become equal in both countries
E) trade will be unrestricted, regardless of relative costs and MRTs
50) Let us define the real wage as the purchasing power of one hour of labor.
In the Ricardian 2X2 model, if two countries under autarky engage in trade
then
A) the real wage will not be affected since this is a financial variable
B) the real wage will increase only if a country attains full specialization
C) the real wage will increase in one country only if it decreases in the other
D) the real wage will rise in both countries.
E) the real wage will fall under pressure of international competition
51) In a two country and two product Ricardian model, a small country is likely to benefit more than the large country because
A) the large country will wield greater political power, and hence will not yield tomarket signals
B) the small country is less likely to trade at price equal or close to its autarkic (domestic) relative prices.
C) the small country is more likely to fully specialize
D) the small country is less likely to fully specialize
E) the small country can raise wages
52) In the Ricardian model, comparative advantage is likely to be due to
A) scale economies
B) home product taste bias
C) greater capital availability per worker
D) labor productivity differences.
E) political pressure
53) If a production possibilities frontier is bowed out (concave to the origin), then production occurs under conditions of
A) constant opportunity costs
B) increasing opportunity costs.
C) decreasing opportunity costs
D) infinite opportunity costs
E) uncertain opportunity costs
54) If the production possibilities frontier of one trade partner ("Country A")
is bowed out (concave to the origin), then increased specialization in production by that country will
A) increase the economic welfare of both countries.
B) increase the economic welfare of only Country A
C) decrease the economic welfare of Country A
D) decrease the economic welfare of Country B
E) not affect the economic welfare of either country
55) If two countries have identical production possibility frontiers, then trade between them is likely to be beneficial if
A) their supply curves are identical
B) their cost functions are identical
C) their demand conditions are identical
D) their incomes are identical
E) their demand functions differ.
Trang 656) If one country's wage level is very high relative to the other's (the relative
wage exceeding the relative productivity ratios), then if they both use the same
currency
A) neither country has a comparative advantage
B) only the low wage country has a comparative advantage
C) only the high wage country has a comparative advantage
D) consumers will still find trade worth while from their perspective
E) it is possible that both will enjoy the conventional gains from trade.
57) If one country's wage level is very high relative to the other's (the relative
wage exceeding the relative productivity ratios) then it is probable that
A) free trade will not improve either both countries welfare
B) free trade will result in no trade taking place
C) free trade will result in each country exporting the good in which it enjoys
comparative advantage.
D) free trade will result in each country exporting the good in which it suffers the
greatest comparative disadvantage
E) free trade will not affect the economic welfare of either country
58) In a two-country, two-product world, the statement "Germany enjoys a
comparative advantage over France in autos relative to ships" is equivalent to
A) France having a comparative advantage over Germany in ships.
B) France having a comparative disadvantage compared to Germany in autos and
ships
C) Germany having a comparative advantage over France in autos and ships
D) France having no comparative advantage over Germany
E) France should produce autos
59) If the United States' production possibility frontier was flatter to the
widget axis, whereas Germany's was flatter to the butter axis, we know that
A) the United States has no comparative advantage
B) Germany has a comparative advantage in butter.
C) the U.S has a comparative advantage in butter
D) Germany has comparative advantages in both products
E) the U.S has a comparative disadvantage in widgets
60) Suppose the United States' production possibility frontier was flatter to
the widget axis, whereas Germany's was flatter to the butter axis We now
learn that the German mark sharply depreciates against the U.S dollar We
now know that
A) the United States has no comparative advantage
B) Germany has a comparative advantage in butter.
C) the United States has a comparative advantage in butter
D) Germany has a comparative advantage in widgets
E) Germany has lost its comparative advantage
61) Suppose the United states production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis We now learn that the German wage doubles, but U.S wages do not change at all We now know that
A) the United States has no comparative advantage
B) Germany has a comparative advantage in butter.
C) the United States has a comparative advantage in butter
D) Not enough information is given
E) Germany gains a comparative advantage in widgets
62) Which of the following statements is TRUE?
A) Free trade is beneficial only if your country is strong enough to stand up toforeign competition
B) Free trade is beneficial only if your competitor does not pay unreasonably lowwages
C) Free trade is beneficial only if both countries have access to the sametechnology
D) Free trade is never beneficial for developing countries
E) Free trade can be beneficial to economic welfare of all countries involved 63) Mahatma Gandhi exhorted his followers in India to promote economic welfare by decreasing imports This approach
A) makes no sense
B) makes no economic sense
C) is consistent with the the Ricardian model of comparative advantage
D) is not consistent with the Ricardian model of comparative advantage.
E) guarantees benefits for Indian workers
64) The Country of Rhozundia is blessed with rich copper deposits The cost of copper produced (relative to the cost of widgets produced) is therefore very low From this information we know that
A) Rhozundia has a comparative advantage in copper
B) Rhozundia should import copper and export widgets
C) Rhozundia should export both widgets and copper
D) Rhozundia should invest in more in widget production
E) Rhozundia may or may not have a comparative advantage in copper 65) We know that in antiquity, China exported silk because no one in any other country knew how to produce this product From this information we know that
A) China had a comparative advantage in silk.
B) China had an absolute advantage, but not a comparative advantage in silk.C) no comparative advantage could exist because the technology was not diffused.D) China exported silk for political reasons even though it had no comparativeadvantage
Trang 7E) China was unable to profit by exporting silk because it was unknown in the rest
of the world
66) The pauper labor theory, and the exploitation argument
A) are theoretical weaknesses that limit the applicability of the Ricardian concept
E) invalidate the Ricardian model
67) If labor productivities were exactly proportional to wage levels
internationally, this would
A) not negate the logical basis for trade in the Ricardian model.
B) render the Ricardian model theoretically correct but practically useless
C) negate the logical basis for trade in the Ricardian model
D) negate the applicability of the Ricardian model if the number of products were
greater than the number of trading partners
E) demonstrate the validity of the Ricardian model
68) The country, multi-product model differs from the country,
two-product model in that, in the former
A) the relative wage ratio will determine the pattern of trade ( which good is
exported by which country.
B) which country will export which product is determined entirely by labor
productivity data
C) full specialization is likely to hold in equilibrium
D) none of the goods are potentially nontraded
E) domestic relative prices are not relevant
69) Assume that transportation costs are especially high for Widgets in the
two-country, two-product Ricardian model, and Country A enjoys a
comparative advantage in Widgets, then
A) country B must also enjoy a comparative advantage in Widgets
B) country B may end up exporting Widgets
C) country A may switch to having a comparative advantage in the other good
D) country A will still export Widgets
E) Trade may be impossible between the two countries.
70) Which of the following is most likely to be an untraded good in a
Ricardian two-country, multi-good model?
A) steel
B) textiles
C) haircuts
D) petroleumE) telemarketer services
71) Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highlyunrealistic
B) The existence of nontraded goods results in a high degree of specializationamong countries
C) International trade has no impact on income distribution
D) The unimportance of economies of scale as a cause of trade
E) Companies tend to export goods in which they have a relatively high level
D) the comparative and absolute advantage that China has in the production ofclothing for export
E) the comparative and absolute advantage that Bangladesh has in the production
of clothing for export
73) The growth of clothing exports originating in Bangladesh is the result of the
A) high productivity of workers in Bangladesh
B) low wages in Bangladesh
C) low productivity of workers in other countries
D) low productivity of workers in Bangladesh in industries other than those that produce clothing for export.
E) high wages in other countries
74) The Ricardian model of international trade demonstrates that trade can
be mutually beneficial Why, then, do governments restrict imports of some goods?
A) Trade can have substantial effects on a country's distribution of income.
B) The Ricardian model is often incorrect in its prediction that trade can bemutually beneficial
C) Import restrictions are the result of trade wars between hostile countries
D) Imports are only restricted when foreign-made goods do not meet domesticstandards of quality
Trang 8E) Restrictions on imports are intended to benefit domestic consumers.
75) The Ricardian two-country two-good model predicts that there are
potential benefits from trade, but NOT
A) the effect of trade on income distribution.
B) the mechanism that determines which country will specialize in which good
C) when one country has an absolute advantage in the production of both goods
D) when one country has significantly lower wages than the other country
E) when both countries have the same types of technology available
76) International trade can have important effects on the distribution of
income because
A) some resources are immobile in the short run.
B) of government corruption
C) the more powerful country dictates the terms of trade
D) rich countries take advantage of poor countries
E) different countries use different currencies
77) The Ricardian model of international trade demonstrates that trade can
be mutually beneficial Why, then, do governments restrict imports of some
C) Import restrictions are the result of trade wars between hostile countries
D) Imports are only restricted when foreign-made goods do not meet domestic
C) the more powerful country dictates the terms of trade
D) rich countries take advantage of poor countries
E) different countries use different currencies
79) Japan's trade policies with regard to rice reflect the fact that
A) japanese rice farmers have significant political power.
B) Japan has a comparative advantage in rice production and therefore exports
most of its rice crop
C) there would be no gains from trade available to Japan if it engaged in free trade
in rice
D) there are gains from trade that Japan captures by engaging in free trade in rice
E) Japan imports most of the rice consumed in the country
80) The specific factors model was developed by A) Paul Samuelson and Ronald Jones.
B) Adam Smith and David Ricardo
C) Richard Nixon and Robert Kennedy
D) C.B deMille and Gordon Willis
E) Bill Clinton and Monica Lewinsky
81) In the specific factors model, labor is defined as a(an) A) mobile factor.
83) In the specific factors model, which of the following is treated as a specific factor?
A) capital
B) laborC) clothD) foodE) technology
84) A factor of production that cannot be used outside of a particular sector of
an economy is a(an) A) specific factor.
Trang 987) The degree of a factor's specificity is directly related to
A) the amount of time required to redeploy the factor to a different industry.
B) the cost of the factor as a proportion of the long-run total cost of production
C) the mobility of the factor, with more mobile factors having more specificity
D) technology differences between two countries, with a more advanced
technology resulting in more factor specificity
E) factor quality, with higher quality factors having a higher level of specificity
88) The degree of a factor's specificity is inversely related to
A) the mobility of the factor, with more mobile factors having less specificity.
B) the amount of time required to redeploy the factor to a different industry
C) the cost of the factor as a proportion of the long-run total cost of production
D) technology differences between two countries, with a less advanced technology
resulting in less factor specificity
E) factor quality, with lower quality factors having a lower level of specificity
89) A worker who has invested in skills will be mobile
than would otherwise be the case.
A) a straight line; diminishing marginal returns
B) a curved line; diminishing marginal returns
C) a straight line; constant marginal returns
D) a curved line; constant marginal returns
E) a curved line; a limited supply of labor
91) In the specific factors model, a country's production function is
because of .
A) a straight line; diminishing marginal returns
B) a curved line; diminishing marginal returns
C) a straight line; constant marginal returnsD) a curved line; constant marginal returnsE) a curved line; a limited supply of labor
92) In the four-quadrant diagram of the specific factors model, the graph in the upper right quadrant is a country's
A) production possibility frontier.
B) labor allocation constraint
C) production function for food
D) production function for cloth
E) labor supply curve
93) In the four-quadrant diagram of the specific factors model, the graph in the lower right quadrant is a country's
A) production function for cloth.
B) production possibility frontier
C) labor allocation constraint
D) production function for food
E) labor supply curve
94) In the four-quadrant diagram of the specific factors model, the graph in the upper left quadrant is a country's
A) production function for food.
B) production possibility frontier
C) labor allocation constraint
D) production function for cloth
E) labor supply curve
95) In the four-quadrant diagram of the specific factors model, the graph in the upper right quadrant is a country's
A) labor allocation constraint
B) production possibility frontier.
C) production function for food
D) production function for cloth
E) labor supply curve
96) The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to and it as more cloth is produced.
A) -MPLF/MPLC; becomes steeper
B) -MPLF/MPLC; becomes flatterC) -MPLF/MPLC; is constantD) -MPLC/MPLF; becomes steeperE) -MPLC/MPLF; is constant
Trang 1097) The slope of a country's production possibility frontier with cloth
measured on the horizontal and food measured on the vertical axis in the
Ricardian model is equal to and it as more cloth is
98) Under perfect competition, the equilibrium price of labor used to produce
cloth will be equal to
A) the marginal product of labor in the production of cloth times the price of
cloth.
B) the average product of labor in the production of cloth times the price of cloth
C) the ratio of the marginal product of labor in the production of cloth to the
marginal product of labor in the production of food times the ratio of the price of
cloth to the price of food
D) the slope of the production possibility frontier
E) the price of cloth divided by the marginal product of labor in the production of
cloth
99) When a country's labor market is in equilibrium in the specific factors
model, the wage rate
A) will be the same in both sectors.
B) will be higher in the export-competing sector
C) will be higher in the import-competing sector
D) will be higher in the sector where product price is higher
E) will be higher in the sector where product price is lower
100) In the specific factors model, which of the following will increase the
quantity of labor used in food production?
A) an increase in the price of food relative to that of cloth
B) an increase in the price of cloth relative to that of food
C) a decrease in the price of labor
D) an equal percentage decrease in the price of food and cloth
E) an equal percentage increase in the price of food and cloth
101) In the specific factors model, which of the following will increase the
quantity of labor used in cloth production?
A) an increase in the price of cloth relative to that of food
B) an increase in the price of food relative to that of cloth
C) a decrease in the price of labor
D) an equal percentage decrease in the price of food and cloth
E) an equal percentage increase in the price of food and cloth
102) In the specific factor model, the effect of an increase in the productivity
of labor in the production of cloth will cause a(an) in the quantity of labor used to produce cloth, a(an) in the quantity of labor used to produce food and a(an) in the wage rate.
A) increase; decrease; increase
B) decrease; increase; increaseC) increase; decrease; decreaseD) decrease; increase; no changeE) increase; increase; no change
103) In the specific factor model, the effect of an increase in the productivity
of labor in the production of food will cause a(an) in the quantity of labor used to produce cloth, a(an) in the quantity of labor used to produce food and a(an) in the wage rate.
A) decrease; increase; increase
B) increase; decrease; increaseC) increase; decrease; decreaseD) decrease; increase; no changeE) increase; increase; no change
104) The slope of a country's production possibility frontier is equal to and the optimal production point is located where the slope is equal
to Assume that output of good Y is measured on the vertical axis, output of good X is measured on the horizontal axis, MPL is the marginal product of labor with a subscript indicating which good, P is the price of a good, and w is the wage rate.
A) -MPLY/MPLX; -PX/PY
B) -PX/PY; -MPLY/MPLX;
C) -PX/w; -PY/wD) -MPLY/w; -MPLF/w E) -MPLX/MPLY; -PX/PY
105) In the specific factors model, a 5% increase in the price of food accompanied by a 5% increase in the price of cloth will cause wages to , the production of cloth to , and the production of food to .
A) increase by 5%; remain unchanged; remain unchanged
B) increase by less then 5%; decrease; increaseC) increase by more then 5%; increase; remain unchangedD) remain constant; increase; increase
E) remain constant; decrease; decrease
106) In the specific factors model, a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to
Trang 11, the production of cloth to , and the production of food to
.
A) increase by less then 5%; decrease; increase
B) increase by 5%; remain unchanged; remain unchanged
C) increase by more then 5%; increase; remain unchanged
D) remain constant; increase; increase
E) remain constant; decrease; decrease
107) In the specific factors model, a 0% increase in the price of food
accompanied by a 5% increase in the price of cloth will cause wages to
, the production of cloth to , and the production of food to
.
A) increase by less then 5%; increase; decrease
B) increase by 5%; remain unchanged; remain unchanged
C) increase by more then 5%; increase; remain unchanged
D) remain constant; increase; increase
E) remain constant; decrease; decrease
108) In the specific factors model, a 5% increase in the price of food
accompanied by a 5% increase in the price of cloth will cause in the
welfare of labor, in the welfare of the fixed factor in the production
of food, and in the welfare of the fixed factor in the production of
cloth.
A) no change; no change; no change
B) an increase; an increase; an increase
C) a decrease; an increase; an increase
D) an increase; a decrease; a decrease
E) a decrease; a decrease; a decrease
109) In the specific factors model, a 5% decrease in the price of food
accompanied by a 5% decrease in the price of cloth will cause in the
welfare of labor, in the welfare of the fixed factor in the production
of food, and in the welfare of the fixed factor in the production of
cloth.
A) no change; no change; no change
B) an increase; an increase; an increase
C) a decrease; an increase; an increase
D) an increase; a decrease; a decrease
E) a decrease; a decrease; a decrease
110) In the specific factors model, a 5% increase in the price of food
accompanied by a 10% increase in the price of cloth will cause in the
welfare of labor, in the welfare of the fixed factor in the production
of food, and in the welfare of the fixed factor in the production of
cloth.
A) an ambiguous change; a decrease; an increase
B) an ambiguous change; an ambiguous change; an ambiguous changeC) a decrease; an ambiguous change; an ambiguous change
D) an increase; a decrease; an increaseE) an ambiguous change; an increase; a decrease
111) In the specific factors model, a 5% increase in the price of food accompanied by a 1% increase in the price of cloth will cause in the welfare of labor, in the welfare of the fixed factor in the production
of food, and in the welfare of the fixed factor in the production of cloth.
A) an ambiguous change; an increase; a decrease
B) an ambiguous change; a decrease; an increaseC) an ambiguous change; an ambiguous change; an ambiguous changeD) a decrease; an ambiguous change; an ambiguous change
E) an increase; a decrease; an increase
112) Refer to the production possibility graph above Assume that the economy is in equilibrium at point e If there is an increase in the wage rate, the new equilibrium is most likely to be
A) point d.
B) point e
C) point f
Trang 12D) point h.
E) point b
114) Refer to the production possibility graph above Assume that the
economy is in equilibrium at point e If the price of good B increases, the new
equilibrium is most likely to be
115) Refer to the production possibility graph above Assume that the
economy is in equilibrium at point e If the labor supply increases due to
immigration, the new equilibrium is most likely to be
116) Refer to the production possibility graph above Assume that the
economy is in equilibrium at point e If a war reduces the country's capital
stock by 40%, the new equilibrium is most likely to be
117) A country that does NOT engage in trade can benefit from trade only if
A) pre-trade and free-trade relative prices are not identical.
B) it employs a unique technology
C) it has an absolute advantage in at least one good
D) its wage rate is below the world average
E) pre-trade and free-trade relative prices are identical
118) The relative price of a unit of cloth in the small isolated country of
Moribundia is 5 units of food When then central city, Mudhole, puts in an
airstrip, the country is able to engage in trade If the relative price of cloth in
the outside world is 3 units of food, then Moribundia will export and
factors used in the production of will benefit.
A) food; immobile; food
B) food; mobile; food
C) cloth; immobile; cloth
D) cloth; mobile; cloth
E) food; immobile; cloth
119) The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food When then central city, Mudhole, puts in an airstrip, the country is able to engage in trade If the relative price of cloth in the outside world is 8 units of food, then Moribundia will export and factors used in the production of will benefit.
A) cloth; immobile; cloth
B) food; immobile; foodC) food; mobile; foodD) cloth; mobile; clothE) cloth; immobile; food
120) In the specific factors model, the effects of trade on welfare are for mobile factors, for fixed factors used to produce the exported good, and for fixed factors used to produce the imported good A) ambiguous; positive; negative
B) ambiguous; negative; positiveC) positive; ambiguous; ambiguousD) negative; ambiguous; ambiguousE) positive; positive; positive
121) In the specific factors model, the effects of trade on welfare overall are and for fixed factors used to produce the exported good they are .
A) positive; positive
B) negative; positiveC) positive; negativeD) ambiguous; positiveE) positive; ambiguous
122) In the specific factors model, the effects of trade on welfare overall are and for fixed factors used to produce the imported good they are .
A) positive; negative
B) positive; positiveC) negative; positiveD) ambiguous; positiveE) positive; ambiguous
123) The overall welfare effects of trade are if .
A) positive; those who gain can compensate those who lose and still be better off
B) positive; more people gain from trade than lose from itC) negative; some people are made worse off by trade
Trang 13D) negative; those who lose can compel those who gain to compensate them for
their losses
E) positive; the domestic economy grows faster than do foreign economies
124) The effect of trade on income distribution
A) can be significant in the sort run.
B) is positive for all segments of an economy
C) is insignificant in the short run
D) implies that there are no real gains from trade
E) refutes the model of comparative advantage
125) A country's budget constraint states that
A) the value of exports must be equal to the value of imports.
B) real income in the exporting country must be equal to real income in the
126) A country's budget constraint states that
A) whether or not a country engages in trade, the value of goods consumed
must be equal to the value of goods produced.
B) real income in the exporting country must be equal to real income in the
importing country
C) unless a country engages in trade, the value of goods consumed cannot exceed
the value of goods produced
D) a country will engage in trade only if the value of goods consumed exceeds the
value of goods produced
E) a country will engage in trade only if the value of goods produced exceeds the
value of goods consumed
127) A country will realize no gains from trade if
A) pre-trade and free-trade relative prices are identical.
B) all countries employ the same technology
C) it does not have an absolute advantage in at least one good
D) its wage exceeds the world average
E) pre-trade and free-trade relative prices are not identical
128) Those who will lose from free trade are factors in sectors that
produce goods that are .
A) immobile; also imported
B) mobile; also imported
C) immobile; exported
D) mobile; exportedE) mobile; untraded
129) Those who will unambiguously gain from free trade are factors
in sectors that produce goods that are .
A) immobile; exported
B) immobile; also importedC) mobile; also importedD) mobile; exportedE) mobile; untraded
130) The effect of trade on specialized employees of import-competing industries will be jobs and pay because they are relatively .
A) fewer; lower; immobile
B) fewer; lower; mobileC) more; lower; immobileD) more; higher; mobileE) more; higher; immobile
131) The effect of trade on specialized employees of exporting industries will
be jobs and pay because they are relatively A) more; higher; immobile
B) fewer; lower; immobileC) fewer; lower; mobileD) more; lower; immobileE) more; higher; mobile
132) Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because A) less; those who are harmed can be compensated by those who gain
B) more; those who are harmed are not compensated by those who gainC) less; the effects on income distribution are minor and inconsequentialD) more; the effects on income distribution are major and consequentialE) less; the wealthy benefit and only the poor lose
133) Economists consider the effects of free trade on income distribution to be important than the effects on overall welfare because A) less; many factors besides trade affect income distribution
B) more; those who are harmed are not compensated by those who gainC) less; the effects on income distribution are minor and inconsequentialD) more; the effects on income distribution are major and consequentialE) less; the wealthy benefit and only the poor lose
134) There is a bias in the political process against free trade because A) those who lose from free trade are better organized than those who gain.
Trang 14B) the gains from free trade cannot be measured.
C) those who gain from free trade can't compensate those who lose
D) foreign governments make large donations to U.S political campaigns
E) there is a high correlation between the volume of imports and the
unemployment rate
135) U.S imports of sugar are limited by an import quota that, according to a
study updated in 2013, imposed annual costs on American consumers of
136) U.S imports of sugar are limited by an import quota that, according to a
study updated in 2013, imposed a total cost on American consumers close to
$ , or an average cost of per year for every man, woman,
and child in the country.
137) U.S imports of sugar are limited by an import quota that, according to a
study updated in 2013, imposed a total cost on American consumers close to
$ , or an average cost of per year for every job saved in the
U.S sugar industry.
A) restrictions on international labor mobility are common.
B) labor is far more mobile internationally than capital
C) restrictions on international labor mobility are rare
D) labor is far more mobile internationally than it is intra-nationally
E) outsourcing increases international labor mobility
139) Refer to the graph above Points A, B, and C represent , , and , respectively.
A) equilibrium wage rate after migration from home to foreign has occurred; the wage rate in foreign before migration; the wage rate in home before migration
B) equilibrium wage rate after migration from foreign to home has occurred; thewage rate in home before migration; the wage rate in foreign before migrationC) the wage rate in home before migration; the wage rate in home after migration;the wage rate in foreign after migration
D) the global wage rate before migration; the wage rate in foreign after migration;the wage rate in home after migration
E) the global wage rate before migration; the wage rate in home after migration;the wage rate in foreign after migration
140) In the two-country model of international labor mobility A) the effect of migration is to cause real wages in the two countries to converge.
B) the effect of migration is to cause real wages in the two countries to diverge.C) labor has only limited international mobility
D) the long-run equilibrium global real wage is equal to the lesser of the migration wages in the two countries
E) the long-run equilibrium global real wage is equal to the greater of the migration wages in the two countries
pre-141) In the two-country model of international labor mobility A) the long-run equilibrium assumes that desired and actual migration are equal.
B) the long-run equilibrium assumes that desired migration exceeds actualmigration
Trang 15C) the long-run equilibrium assumes that actual migration exceeds desired
142) In the two-country model of international labor mobility
A) migration results in increased global output, although some groups are
made worse off.
B) migration results in increased global output, and all groups are made better off
C) migration has no effect on global output, although some groups are made worse
off
D) migration has no effect on global output, although some groups are made better
off
E) migration may reduce global output, although some groups are made better off
143) Immigration into the U.S over the past century has caused the
percentage of immigrants in the U.S population to
A) fall steadily until the 1970s and increase thereafter.
B) remain relatively constant over the time period
C) fall steadily over the entire century
D) rise steadily over the entire century
E) rise steadily until the 1970s and fall thereafter
144) In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from
across the border would
A) move the point of production along the production possibility curve
B) shift the production possibility curve outward, and increase the production of
both goods
C) shift the production possibility curve outward and decrease the production of the
labor-intensive product
D) shift the production possibility curve outward and decrease the production
of the capital-intensive product.
E) shift the possibility curve outward and displace preexisting labor
145) In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in
A) tastes and preferences
B) military capabilities
C) the size of their economies
D) relative abundance of factors of production.
E) labor productivities
146) One way in which the Heckscher-Ohlin model differs from the Ricardo
model of comparative advantage is by assuming that is (are)
identical in all countries.
A) factor endowmentsB) scale of productionC) factor intensities
D) technology
E) opportunity costs
147) If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis), then the absolute value of the slope of its production possibility frontier is equal to
A) the opportunity cost of good X.
B) the price of good X divided by the price of good Y
C) the price of good Y divided by the price of good X
D) the opportunity cost of good Y
E) the cost of capital (assuming that good Y is capital intensive) divided by the cost
of labor
148) The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that the former
A) has only two countries
B) has only two products
C) has two factors of production.
D) has two production possibility frontiers (one for each country)
E) has varying wage rates
149) In the 2-factor, 2 good Heckscher-Ohlin model, the country with a relative abundance of will have a production possibility frontier that
is biased toward production of the good.
A) labor; labor intensive
B) labor; capital intensiveC) land; labor intensiveD) land; capital intensiveE) capital; land intensive
150) In the 2-factor, 2 good Heckscher-Ohlin model, the country with a relative abundance of will have a production possibility frontier that
is biased toward production of the good.
A) capital; capital intensive
B) labor; capital intensiveC) land; labor intensiveD) land; capital intensiveE) labor; land intensive
151) In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when
A) there is no factor substitution in production.
B) the opportunity cost of production is constant
Trang 16C) there are unemployed factor resources.
D) a country does not engage in trade
E) transportation costs are very high
152) The assumption of diminishing returns in the Heckscher-Ohlin model
means that, unlike in the Ricardian model, it is likely that
A) countries will not be fully specialized in one product.
B) countries will benefit from free international trade
C) countries will consume outside their production possibility frontier
D) comparative advantage will not determine the direction of trade
E) global production will decrease under trade
153) In the Heckscher-Ohlin model, countries are assumed to differ only in
154) In the 2-factor, 2 good Heckscher-Ohlin model, trade will the
owners of a country's factor and will the good that uses
that factor intensively.
A) benefit; abundant; export
B) harm; abundant; import
C) benefit; scarce; export
D) benefit; scarce; import
E) harm; scarce; export
155) According to the Heckscher-Ohlin model, the source of comparative
156) In the 2-factor, 2 good Heckscher-Ohlin model, trade will the
owners of a country's factor and will the good that uses
that factor intensively.
A) harm; scarce; import
B) harm; abundant; import
C) benefit; scarce; export
D) benefit; scarce; import
E) harm; scarce; export
157) According to the Heckscher-Ohlin model A) the gainers from trade could compensate the losers and still retain gains.
B) everyone gains from trade
C) the scarce factor gains from trade and the abundant factor loses
D) a country gains from trade if its exports have a high value added
E) only the country with the more advanced technology gains from trade
158) In the Heckscher-Ohlin model, when two countries begin to trade with each other
A) the relative prices of traded goods in the two countries converge.
B) relative factor prices in the two countries diverge
C) benefits from trade are evenly distributed between the two countries
D) all factors in both countries will gain from trade
E) all factors in one country will gain, but there may be no gains in the othercountry
Assume that only two countries, A and B, exist.
159) Refer to the table above If good S is capital intensive, then following the Heckscher-Ohlin Theory
A) country B will export good S.
B) country A will export good S
C) both countries will export good S
D) trade will not occur between these two countries
E) both countries will import good S
160) Refer to the table above If you are told that Country B is very much richer than Country A, then the correct answer is
A) country B will export good S.
B) country A will export good S
C) both countries will export good S
D) trade will not occur between these two countries
E) both countries will import good S
161) Refer to the table above You are told that Country B is very much larger than country A The correct answer is
A) country B will export good S.
B) country A will export good S
C) both countries will export good S
D) trade will not occur between these two countries
E) both countries will import good S
Trang 17162) Refer to the table above You are told that Country B has no minimum
wage or child labor laws Now the correct answer is
A) country B will export good S.
B) country A will export good S
C) both countries will export good S
D) trade will not occur between these two countries
E) both countries will import good S
163) If a good is labor intensive it means that the good is produced
A) using relatively more labor than goods that are not labor intensive.
B) using labor as the only input
C) using more labor per unit of output than goods that are not labor intensive
D) using labor such that the total cost of labor is greater than the total cost of
capital
E) using labor such that the cost of labor is more than 50% of total cost
164) In the Heckscher-Ohlin model, when there is international-trade
equilibrium
A) the relative price of the capital intensive good in the capital rich country
will be the same as that in the capital poor country.
B) the capital rich country will charge less for the capital intensive good than the
price paid by the capital poor country for the capital-intensive good
C) the capital rich country will charge more for the capital intensive good than the
price paid by the capital poor country for the capital-intensive good
D) workers in the capital rich country will earn more than those in the poor
country
E) the workers in the capital rich country will earn less than those in the poor
country
165) If a good is capital intensive it means that the good is produced
A) using relatively more capital than goods that are not labor intensive.
B) using capital as the only input
C) using more capital per unit of output than goods that are not capital intensive
D) using capital such that the total cost of capital is greater than the total cost of
labor
E) using capital such that the cost of capital is more than 50% of total cost
166) The Heckscher-Ohlin model predicts all of the following EXCEPT
A) the volume of trade.
B) which country will export which product
C) which factor of production within each country will gain from trade
D) that relative wages will tend to become equal in both trading countries
E) that trade increases a country's overall welfare
167) If Australia has relatively more land per worker, and Belgium has relatively more capital per worker, then if trade began between these two countries
A) the relative price of the land-intensive product would increase in Australia.
B) the relative price of the capital-intensive product would increase in Australia.C) the relative price of the land-intensive product would increase in Belgium.D) the relative price of the capital-intensive product would decrease in Belgium.E) relative product prices would diverge between Australia and Belgium
168) If Australia has more land per worker, and Belgium has more capital per worker,then if trade began between these two countries
A) the real income of landowners in Belgium would decline.
B) the real income of capital owners in Australia would increase
C) the real income of labor in Australia would decline
D) the real income of labor in Belgium would decline
E) the real income of labor in both countries would decline
169) If Japan is relatively capital rich and the United States is relatively land rich, and if food is relatively land intensive then trade between these two, formerly autarkic countries will result in
A) an increase in the relative price of food in the U.S.
B) an increase in the relative price of food in Japan
C) a global increase in the relative price of food
D) a decrease in the relative price of food in both countries
E) an increase in the relative price of food in both countries
170) Trade benefits a country by A) increasing available consumption choices.
B) reducing the need for specialization in production
C) reducing the relative price of the exported good
D) increasing the real income of all resource owners
E) increasing the wage rate
171) If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, we predict that Gambinia will export
A) labor-intensive goods.
B) capital-intensive goods
C) both capital- and land-intensive goods
D) land-intensive goods
E) both labor- and land-intensive goods
172) If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should A) engage in free trade.
Trang 18B) protect the capital-intensive product.
C) protect the land-intensive product
D) protect the labor-intensive product
E) discontinue all international trade
173) Starting from an autarky (no-trade) situation with Heckscher-Ohlin
model, if Country H is relatively labor abundant, then once trade begins
A) wages should rise and rents should fall in H.
B) wages and rents should rise in H
C) wages and rents should fall in H
D) wages should fall and rents should rise in H
E) rent will be unchanged but wages will rise in H
174) Suppose that there are two factors, capital and land, and that the United
States is relatively land endowed while the European Union is relatively
capital-endowed According to the Heckscher-Ohlin model
A) European capitalists should support U.S.-European free trade.
B) European landowners should support U.S.-European free trade
C) all capitalists in both countries should support free trade
D) all landowners should support free trade
E) the U.S should compensate European countries once trade commences
175) International trade has strong effects on income distributions Therefore,
international trade
A) will tend to hurt some groups in each trading country.
B) is beneficial to everyone in both trading countries
C) will tend to hurt one trading country
D) will tend to hurt everyone in both countries
E) will be beneficial to all those engaged in international trade
176) Factors tend to be specific to certain uses and products
A) in the short run.
B) in countries lacking comparative advantage
C) in capital-intensive industries
D) in labor-intensive industries
E) in countries lacking fair labor laws
177) If the price of the capital intensive product rises more than does the price
of the land intensive product, then
A) the relative price of the capital intensive product will fall to some point
between the pretrade relative prices.
B) demand will shift away from the capital-intensive product, and its production
will decrease
C) demand will shift away from the capital-intensive product, and its production
will decrease relative to that of the land intensive product
D) the production of the capital-intensive product will decrease, but by less thanproduction of the land-intensive product
E) the country that exports the capital-intensive good will lose its comparativeadvantage
178) If trade opens up between the two formerly autarkic countries, Australia and Belgium, then
A) the real income of both countries may increase.
B) the real income of Australia and of Belgium will increase
C) the real income of Australia but not of Belgium will increase
D) the real income of neither country will increase
E) the real income of both countries will increase
179) The Leontief Paradox A) failed to support the validity of the Heckscher-Ohlin model.
B) supported the validity of the Ricardian theory of comparative advantage
C) supported the validity of the Heckscher-Ohlin model
D) failed to support the validity of the Ricardian theory
E) proved that the U.S economy is different from all others
180) The Leontief Paradox A) refers to the finding that U.S exports were more labor intensive than its imports.
B) refers to the finding that U.S Exports were more capital intensive than itsexports
C) refers to the finding that the U.S produces outside its Edgeworth Box
D) still accurately applies to today's pattern of U.S international trade
E) refers to the fact that Leontief—an American economist—had a Russian name
181) The 1987 study by Bowen, Leamer and Sveikauskas A) supported the validity of the Leontief Paradox.
B) supported the validity of the Heckscher-Ohlin model
C) used a two-country and two-product framework
D) demonstrated that in fact countries tend to use different technologies
E) proved that the U.S.'s comparative advantage relied on skilled labor
182) Empirical observations on actual North-South trade patterns tend to A) support the validity of the Heckscher-Ohlin model.
B) support the validity of the Leontief Paradox
C) support the validity of the Rybczynski Theorem
D) support the validity of the wage equalization theorem
E) support the validity of the neo-imperialism exploitation theory
183) The Case of the Missing Trade refers to A) the fact that factor trade is less than predicted by the Heckscher-Ohlin theory.
Trang 19B) the 9th volume of the Hardy Boys' Mystery series.
C) the fact that world exports does not equal world imports
D) the fact that the Heckscher Ohlin theory predicts much less volume of trade than
actually exists
E) the fact that the Heckscher Ohlin theory never applies to China-U.S trade
practices
184) If two countries are very different in relative factor abundance, then
empirical support for which of the following would less likely?
A) the Factor Price Equalization Theorem
B) the Heckscher-Ohlin Theorem
C) the Law of One Price
D) the Law of Demand
E) the Gravity Theorem
185) Which of the following empirical studies cast the most doubt on the
Heckscher-Ohlin model?
A) the study by Wassily Leontief
B) the study by Bowen, Leamer, and Sveikauskas
C) the study by David Ricardo
D) the study by Adam Smith
E) the study by Davis and Weinstein
186) Which of the following empirical studies provided the most support for
the heckscher-Ohlin model?
A) the study by Wassily Leontief
B) the study by Bowen, Leamer, and Sveikauskas
C) the study by David Ricardo
D) the study by Adam Smith
E) the study by Davis and Weinstein
187) Empirical support for the Heckscher-Ohlin model was weakest when the
study applied
A) all of the assumptions of the model
B) all of the assumptions of the model except that regarding technology
C) all of the assumptions of the model except those regarding technology,
goods and shipping costs.
D) all of the assumptions of the model except those regarding technology, shipping
costs and gravity
E) all of the assumptions of the model except those regarding shipping costs
188) Which of the following is an assertion of the Heckscher-Ohlin model?
A) The wage-rental ratio is determined by relative product prices
B) An increase in a country's labor supply will increase production of both the
capital-intensive and the labor-intensive good
C) In the long-run, labor is mobile and capital is not
D) Factor price equalization will occur only if there is costless mobility of allfactors across borders
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparativeadvantage
189) Which of the following is an assertion of the Heckscher-Ohlin model? A) The wage-rental ratio determines the capital-labor ratio in a country's industries.
B) An increase in a country's labor supply will increase production of both thecapital-intensive and the labor-intensive good
C) In the long-run, labor is mobile and capital is not
D) Factor price equalization will occur only if there is costless mobility of allfactors across borders
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparativeadvantage
190) Which of the following is an assertion of the Heckscher-Ohlin model? A) An increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good.
B) An increase in a country's labor supply will increase production of both thecapital-intensive and the labor-intensive good
C) In the long-run, labor is mobile and capital is not
D) Factor price equalization will occur only if there is costless mobility of allfactors across borders
E) Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparativeadvantage
191) The meaning of "terms of trade" is A) the price of a country's exports divided by the price of its imports.
B) the amount of exports sold by a country
C) the price conditions bargained for in international markets
D) the quantities of imports received in free trade
E) the tariffs in place between two trading countries
192) A country cannot produce a mix of products with a higher value than where
A) the isovalue line is tangent to the production possibility frontier.
B) the isovalue line intersects the production possibility frontier
C) the isovalue line is above the production possibility frontier
D) the isovalue line is below the production possibility frontier
E) the isovalue line is tangent with the indifference curve
193) Tastes of individuals are represented by
Trang 20A) indifference curves.
B) production possibility frontiers
C) isovalue lines
D) production functions
E) the terms of trade
194) If the ratio of price of cloth (PC) divided by the price of food (PF)
increases in the international marketplace, then
A) the terms of trade of cloth exporters will improve.
B) all countries would be better off
C) the terms of trade of food exporters will improve
D) the terms of trade of all countries will improve
E) the terms of trade of cloth exporters will worsen
195) If the ratio of price of cloth (PC) divided by the price of food (PF)
increases in the international marketplace, then
A) the cloth exporter will increase the quantity of cloth produced.
B) the cloth exporter will increase the quantity of cloth exported
C) the food exporter will increase the quantity of food exported
D) the cloth exporter will decrease the quantity of cloth exported
E) the country would import more cloth
196) If the ratio of price of cloth (PC) divided by the price of food (PF)
increases in the international marketplace, then
A) world relative quantity of cloth supplied will increase.
B) world relative quantity of cloth supplied and demanded will increase
C) world relative quantity of cloth supplied and demanded will decrease
D) world relative quantity of cloth demanded will decrease
E) world relative quantity of food will increase
197) A country will be able to consume a combination of goods that is not
attainable solely from domestic production if
A) the world terms of trade differ from its domestic relative costs.
B) the country specializes in one product
C) the country avoids international trade
D) the world terms of trade equal the domestic relative costs
E) the country's domestic production value equals world relative value
198) Terms of trade refers to
A) the relative price at which trade occurs.
B) what goods are imported
C) what goods are exported
D) the volume of trade
E) the tariffs applied to trade
199) If points A and B are two locations on a country's production possibility frontier, then
A) the country could produce either of the two bundles.
B) consumers are indifferent between the two bundles
C) producers are indifferent between the two bundles
D) at any point in time, the country could produce both
E) both bundles must have the same relative cost
200) If the economy is producing at point a on its production possibility frontier, then
A) all of the country's workers are employed.
B) all of the country's workers are specialized in one product
C) all of the country's capital is used for one product
D) all of its capital is used, but not efficiently
E) all of the country's exports are produced in equal amounts
201) Refer to the figure above, which shows a country's possible production possibility frontiers and indifference curves If the country is producing at , then moving to will cause utility to .
A) point b; point c; remain unchanged
B) point a; point b; increaseC) point c; point b; increaseD) point c; point b; decreaseE) point a; point c; remain unchanged
202) If two countries with diminishing returns and different marginal rates of substitution between two products were to engage in trade, then
A) the marginal rates of substitution of both would become equal.
B) the shapes of their respective production possibility frontiers would change.C) the larger of the two countries would dominate their trade
D) the country with relatively elastic supplies would export more
Trang 21E) the opportunity costs for the smaller country would increase.
203) If a country began exporting product A and importing product B, then,
as compared to the autarky (no-trade) situation, the marginal cost of product
E) remain the same
204) When the production possibility frontier shifts out relatively more in one
A) this will tend to worsen the country's terms of trade.
B) this will tend to improve the country's terms of trade
C) this will tend to leave the country's terms of trade unchanged
D) this will tend to worsen the terms of trade for the country's trading partner
E) this will increase the price of cloth relative to the imported good
206) Suppose that a "small country" experiences growth strongly biased
toward its export, cloth
A) this will have no effect on terms of trade for the country's trading partner.
B) this will tend to worsen the country's terms of trade
C) this will tend to improve the country's terms of trade
D) this will tend to worsen terms of trade for the country's trading partner
E) this will tend to improve terms of trade for the country's trading partner
207) Refer to the figure above, which shows a country's possible production possibility frontiers and indifference curves If the country is producing at , then moving to will cause utility to .
A) point c; point b; remain unchanged
B) point a; point b; increaseC) point c; point b; increaseD) point c; point b; decreaseE) point a; point c; remain unchanged
208) Refer to the figure above, which shows a country's possible production possibility frontiers and indifference curves If the country is producing at , then moving to will cause utility to .
A) point b; point a; increase
B) point a; point b; increaseC) point c; point b; increaseD) point c; point b; decreaseE) point a; point c; remain unchanged
209) If the U.S (a large country) imposes a tariff on its imported good, this will tend to
A) improve the terms of trade of the United States.
B) have no effect on terms of trade
C) improve the terms of trade of all countries
D) cause a deterioration of U.S terms of trade
E) raise the world price of the good imported by the United States
210) If Slovenia is a small country in world trade terms, then if it imposes a large series of tariffs on many of its imports, this would
A) have no effect on its terms of trade.
B) improve its terms of trade
C) deteriorate its terms of trade
Trang 22D) decrease its marginal propensity to consume.
E) increase its exports
211) If Slovenia is a large country in world trade, then if it imposes a large set
of tariffs on many of its imports, this would
A) improve its terms of trade.
B) have no effect on its terms of trade
C) harm its terms of trade
D) decrease its marginal propensity to consume
E) increase its exports
212) If Slovenia were a large country in world trade, then if it imposes a large
set of tariffs on its imports, this must
A) decrease the internal price of imports below the world market rate.
B) cause retaliation on the part of its trade partners
C) harm Slovenia's real income
D) improve Slovenia's real income
E) improve the real income of its trade partners
213) If Slovenia were a large country in world trade, then if it instituted a
large set of subsidies for its exports, this must
A) harm its terms of trade.
B) have no effect on its terms of trade
C) improve its terms of trade
D) decrease its marginal propensity to consume
E) harm world terms of trade
214) If Slovenia were a large country in world trade, then if it instituted a
large set of subsidies for its exports, this must
A) improve the real income of its trade partners.
B) cause retaliation on the part of its trade partners
C) harm Slovenia's real income
D) improve Slovenia's real income
E) increase internal prices above the world market rate
215) If a small country were to levy a tariff on its imports then this would
A) decrease the country's economic welfare.
B) have no effect on that country's economic welfare
C) increase the country's economic welfare
D) change the terms of trade
E) raise prices on its exports in other countries
216) An increase in a country's net commodity terms of trade will
A) not always guarantee positive changes in the country's economy.
B) always increase the country's economic welfare
C) always increase the country's real income
D) never increase the country's quantity of exports
E) always increase the country's production of its import competing good
217) An import tariff will cause the relative demand for to and the relative supply for to .
A) imports; decrease; imports; increase
B) imports; increase; imports; decreaseC) exports; increase; exports; decreaseD) exports; decrease; exports; increaseE) exports; increase; imports; decrease
218) An export subsidy will cause the relative demand for to and the relative supply for to .
A) exports; decrease; exports; increase
B) imports; decrease; imports; increaseC) imports; increase; imports; decreaseD) exports; increase; exports; decreaseE) exports; increase; imports; decrease
219) An import tariff will cause the terms of trade of the country to and will the country.
A) importing; improve; benefit
B) exporting; improve; benefitC) importing; suffer; harmD) exporting; improve; harmE) importing; improve; harm
220) An export subsidy will cause the terms of trade of the country
to and will the country.
A) exporting; suffer; harm
B) exporting; improve; benefitC) importing; suffer; harmD) importing; suffer; benefitE) importing; improve; harm
221) International borrowing and lending may be interpreted as one form of A) intertemporal trade.
B) intermediate trade
C) trade in services
D) unrequited international transfers
E) aid to offset trade advantages
222) If one observes that Japan was traditionally a net foreign lender, one could conclude that relative to its international trade and financial partners A) Japan's intertemporal production possibilities are biased toward present consumption.