Economics 252 – Review Questions Chapter 6
(1) The export of motorcycles from the
(a) trade flow. (b) resource flow.
(c) financial
flow. (d) technology flow.
(2) The purchase of US securities by residents
of
(a)
trade flow.
(b) labor
flow. (c) financial flow. (c) technology flow.
(3) The emigration of
software designers from
(a) trade flow. (b) resource flow.
(c) financial
flow. (d) information flow.
(4) The purchase by an American firm of the
right to produce a prescription drug patented in
(a)
trade flow.
(b) capital
flow. (c) financial flow. (d) technology flow.
(5) The
(a)
(6) In recent years the
(a) exported more goods
and services than it has imported.
(b) imported more goods
and services than it has exported.
(c) realized an
approximate balance in its imports and exports.
(d) experienced a falling
absolute dollar amount of imports and a rising absolute dollar amount of
exports.
(7) More than
half of the
(a) the nations of
(b) the developing
countries of Africa, Asia, and
(c) other industrialized
nations, for example,
(d)
(8) Protective tariffs are:
(a) maximum limits on the
quantity or total value of specific products imported to a nation.
(b) excise taxes or duties
placed on imported products.
(c) licensing
requirements, unreasonable quality standards, and the like designed to impede
imports.
(d) government payments to
domestic producers to reduce the world prices of exported goods.
(9) Export
subsidies are:
(a) maximum limits on the
quantity or total value of specific products imported to a nation.
(b) excise taxes or duties
placed on imported products.
(c) licensing
requirements, unreasonable quality standards, and the like designed to impede
imports.
(d) government payments to
domestic producers to reduce the world prices of exported goods.
Utilize Table 1 to answer
Questions (10) to (13).
Table 1
(10) In Table 1, the
equilibrium dollar price of luta is:
(a) $10. (b) $8.
(c) $6. (d) $2.
(11) In Table 1,
the luta price of a dollar exchange rate in this
market is:
(a) 8
luta for one dollar. (c) 6 luta for one
dollar.
(b) .60
luta for one dollar. (d) .125 luta for one
dollar.
(12) In Table 1, suppose that the
(a) rise and the dollar will depreciate.
(b) fall and the dollar will depreciate.
(c) fall and the dollar will appreciate.
(d) rise and the dollar will appreciate.
(13) The General Agreement on Tariffs and Trade
(GATT) is based on the principle of:
(a) establishing a single
international currency.
(b) tariff reductions
through multilateral negotiations.
(c) converting tariffs to
import quotas.
(d) establishing common environmental and labor standards for all member nations.
Use
Table 2 to answer Questions (14) to (19).
Table 2
(14) In Table 2, the
domestic opportunity cost of producing 1 ton of steel in Alpha is:
(a) ½ ton of
wheat. (b) 1 ton of wheat. (c) 15 tons of wheat. (d) 30 tons of wheat.
(15) In Table 2, the
domestic opportunity cost of producing 1 ton of steel in Omega is:
(a) ½ ton of
wheat. (b) 2 tons of wheat. (c) 3 tons of wheat. (d) 5 tons of wheat.
(16) In Table 2, Alpha
has a comparative advantage in producing:
(a) neither steel nor
wheat. (b) both steel and
wheat. (c) steel. (d) wheat.
(17) On the basis
of information in Table 2,
(a) Alpha should export both steel and wheat to
Omega.
(b) Omega should export both steel and wheat to
Alpha.
(c) Omega should export steel to Alpha and Alpha
should export wheat to Omega.
(d) Alpha should export steel to Omega and Omega
should export wheat to Alpha.
(18) In Table 2, after specialization, Alpha
will produce:
(a) 60 tons of steel and Omega will produce 45
tons of wheat.
(b) 20 tons of steel and Omega will produce 60 tons
of wheat.
(c) 60 tons of steel and Omega will produce 60
tons of wheat.
(d) 30 tons of steel and Omega will produce 30 tons
of wheat.
(19) In Table 2, if Alpha and Omega each were
producing at alternatives B before trade, the gain from specialization and
trade would be:
(a) 30 tons of wheat.
(b) 30 tons of steel and 30 tons of wheat.
(c) 15 tons of steel.
(d) 60 tons of wheat and 60 tons of steel.
(20) The
World Trade Organization (WTO):
(a) sets tariffs to
balance international trade among nations.
(b) is an agency of the
United Nations.
(c) monitors and mediates
trade issues among member nations.
(d) sets exchange rates to balance international trade among nations.
(21) American critics of the WTO argue that
free international trade and investment will:
(a) reduce
(b) reduce employment in
developing nations.
(c) undermine
environmental and labor protections in the
(d)
increase immigration from low-income to high-income
nations.
(22) Proponents of the WTO argue that free
international trade and investment will:
(a) reduce economic
growth rates in the industrial economies.
(b) reduce employment in
developing nations.
(c) increase world
poverty.
(d)
increase living standards of all trading nations.
(23) The countries comprising NAFTA are:
(a)
(b) the
(c) the European
Economic
(d)
(24)
Which of the following nations is not a member of the Euro zone?
(a)
(25) . The nations of the Euro zone have:
(a) abandoned their
national currencies and switched to a common currency.
(b) abandoned their
national currencies and switched to American dollars.
(c) formed a single
country called the Union of European Nations (UEN).
(d) recently admitted