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| 1 | |
Use the following diagram to answer the next question.
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Refer to the above diagram, wherein Sd and Dd are the domestic supply and demand for a product and $7 is the world price of that product. An import quota of 20 units will: |
| | A) | have no impact on world price |
| | B) | raise price to $10 |
| | C) | raise price to $13 |
| | D) | generate revenue to the domestic government equal to $60 |
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| 2 | |
Use the following diagram to answer the next question.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384260/quiz35b_2.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (13.0K)</a>]]>
Refer to the above diagram, wherein Sd and Dd are the domestic supply and demand for a product and $7 is the world price of that product. If a $3 per unit tariff is imposed, the quantities sold by domestic and foreign producers, respectively, will be: |
| | A) | 30 and 10 |
| | B) | 20 and 20 |
| | C) | 10 and 30 |
| | D) | 30 and 0 |
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| 3 | |
Two nations, Delta and Gamma, each produce goods X and Y under conditions of constant costs. Assume that by devoting all of its resources to the production of good X, Delta can produce 100 units of X. By devoting all of its resources to Y, Delta can produce 150 Y. The comparable figures for Gamma are 30 X and 30 Y. We can conclude that: |
| | A) | Delta has a comparative advantage in both X and Y |
| | B) | Gamma has a comparative advantage in both X and Y |
| | C) | Delta has a comparative advantage in X and Gamma has a comparative advantage in Y |
| | D) | Delta has a comparative advantage in Y and Gamma has a comparative advantage in X |
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| 4 | |
Answer the next question on the basis of the following domestic supply and demand schedules for aluminum.
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Refer to the data. Suppose the world price of aluminum is $10. The total amount of tax revenue collected with a $5 tariff will be: |
| | A) | $75 |
| | B) | $160 |
| | C) | $200 |
| | D) | $600 |
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| 5 | |
In Delta, it takes the same amount of resources to produce either 2 units of good R or 3 units of good S. In Gamma, it takes the same amount of resources to produce either 1 unit of good R or 3 units of good S. Goods R and S are both produced under conditions of constant costs; Delta and Gamma are the only two countries. Which of the following would be feasible terms of trade between the two countries? |
| | A) | 1 unit of R for 2 units of S |
| | B) | 1 units of R for 1/2 unit of S |
| | C) | 1 unit of R for 1 unit of S |
| | D) | 1 units of R for 5 units of S |
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| 6 | |
Answer the next question on the basis of the following data for the hypothetical nations of Alpha and Beta. Qs and Qd are domestic quantities supplied and demanded, respectively.
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Refer to the above data. Alpha's import demand schedule is given by: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384260/quiz35b_6a.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (3.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384260/quiz35b_6b.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (3.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384260/quiz35b_6c.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (3.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073273082/384260/quiz35b_6d.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (3.0K)</a>]]> |
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| 7 | |
Use the following diagram to answer the next question.
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Refer to the diagram. Line AB is the production possibilities curve for a specific country and line AC is its trading possibilities curve. We can conclude that this country: |
| | A) | has chosen to specialize in the production of franks |
| | B) | has chosen to specialize in the production of beans |
| | C) | will export beans and import franks |
| | D) | has an absolute advantage in the production of both franks and beans relative to its trading partners |
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| 8 | |
Answer the next question on the basis of the following production possibilities tables for two countries, North and South Cantina:
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Refer to the above tables. Which of the following would be feasible terms of trade between North and South Cantina? |
| | A) | 1 smoke for 1/3 mirror |
| | B) | 1 smoke for 1 mirror |
| | C) | 1 smoke for 5 mirrors |
| | D) | 1 smoke for 3 mirrors |
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| 9 | |
Use the following diagram to answer the next question.
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Refer to the above diagram, wherein Sd and Dd are the domestic supply and demand for a product and $7 is the world price of that product. A $3 per unit tariff will increase the revenues of domestic producers by: |
| | A) | $30 |
| | B) | $70 |
| | C) | $130 |
| | D) | $200 |
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| 10 | |
Which organization was created in 1994 to both resolve trade disputes and meet periodically to consider trade liberalization? |
| | A) | International Monetary Fund |
| | B) | World Trade Organization |
| | C) | World Bank |
| | D) | Doha Round |
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