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    IRC030 Ch.2 - Practice

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    Mơ Bờlacachiu

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    IRC030 Ch.2 - Practice

    Uploaded by

    Mơ Bờlacachiu
    5 views2 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
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    5 views2 pages

    IRC030 Ch.2 - Practice

    Uploaded by

    Mơ Bờlacachiu

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    IRC030 International Economics Spring 2024

    In-class Practice (Ch.1-2)


    Name

    1. The Mercantilists did not advocate:


    a. free trade
    b. stimulating the nation's exports
    c. restricting the nations' imports
    d. the accumulation of gold by the nation

    2. According to Adam Smith, international trade is based on:


    a. absolute advantage
    b. comparative advantage
    c. both absolute and comparative advantage
    d. neither absolute nor comparative advantage

    3. If in a two-nation (A and B), two-commodity (X and Y) world, it is established that nation


    A has a comparative advantage in commodity X, then nation B must have:
    a. an absolute advantage in commodity Y
    b. an absolute disadvantage in commodity Y
    c. a comparative disadvantage in commodity Y
    d. a comparative advantage in commodity Y

    4. If with one hour of labor time nation A can produce either 3X or 3Y while nation B can
    produce either 1X or 3Y (and labor is the only input):
    a. nation A has a comparative disadvantage in commodity X
    b. nation B has a comparative disadvantage in commodity Y
    c. nation A has a comparative advantage in commodity X
    d. nation A has a comparative advantage in neither commodity

    5. With one hour of labor time nation A can produce either 3X or 3Y, while nation B can
    produce either 1X or 3Y (and labor is the only input). If 3X is exchanged for 3Y:
    a. nation A gains 2X
    b. nation B gains 6Y
    c. nation A gains 3Y
    d. nation B gains 3Y
    IRC030 International Economics Spring 2024

    6. With one hour of labor time nation A can produce either 3X or 3Y while nation B can
    produce either 1X or 3Y (and labor is the only input). The range of mutually beneficial
    trade between nation A and B is:
    a. 3Y < 3X < 5Y
    b. 5Y < 3X < 9Y
    c. 3Y < 3X < 9Y
    d. 1Y < 3X < 3Y

    7. If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B:


    a. there will be no trade between the two nations
    b. the relative price of X is the same in both nations
    c. the relative price of Y is the same in both nations
    d. all of the above

    8. A rough measure of the degree of economic interdependence of a nation is given by:


    a. the size of the nations' population
    b. the percentage of its population to its GDP
    c. the percentage of a nation's imports and exports to its GDP
    d. all of the above

    9. Economic interdependence is greater for:


    a. small nations
    b. large nations
    c. developed nations
    d. developing nations

    10. The gravity model of international trade predicts that trade between two nations is
    larger
    a. the larger the two nations
    b. the closer the nations
    c. the more open are the two nations
    d. all of the above

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