 |
1 | |
International specialisation takes place because of __________ |
|
| | A) | differences in technology |
| | B) | differences in factor endowments |
| | C) | scale economies |
| | D) | all of the above |
|
2 | |
International differences in opportunity costs lead to countries acquiring __________ |
|
| | A) | comparative advantage |
| | B) | high exchange rates |
| | C) | trade barriers |
| | D) | trade quotas |
|
3 | |
The main cause of different relative costs between countries are ___________ |
|
| | A) | relative factor competition |
| | B) | relative factor mobility |
| | C) | relative factor substitution |
| | D) | relative factor endowments |
|
4 | |
The level of the equilibrium exchange rate offsets international differences in ____________ |
|
| | A) | comparative advantage |
| | B) | absolute advantage |
| | C) | opportunity cost |
| | D) | relative costs |
|
5 | |
The imposition of a tariff causes consumption to _________ and imports to ________ |
|
| | A) | rise, rise |
| | B) | fall, rise |
| | C) | fall, fall |
| | D) | rise, fall |
|
6 | |
A tariff causes domestic firms to __________ and consumers to __________ |
|
| | A) | overproduce, underconsume |
| | B) | overproduce, overconsume |
| | C) | underproduce, underconsume |
| | D) | underproduce, overconsume |
|
7 | |
If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from ___________ |
|
| | A) | an import subsidy |
| | B) | a quota |
| | C) | comparative advantage |
| | D) | an export subsidy |
|
8 | |
If a country does not have an absolute cost advantage in the production of any good, there is no incentive to trade |
|
| | A) | TRUE |
| | B) | FALSE |
|
9 | |
International trade can never hurt any people |
|
| | A) | TRUE |
| | B) | FALSE |
|
10 | |
Tariffs always distort trade and are never justified. |
|
| | A) | TRUE |
| | B) | FALSE |
|
11 | |
Export subsidies do not involve waste |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre