International Trade Study Guide
Mid-semester exam sample 21/02/2012 Shabbir Ahmad Mid Semester Exam- Sample questions
Section 1-Multiple choice
1. Benefits of international trade are a. limited to tangible goods. b. limited to intangible goods. c. limited to all goods but not services. d. limited to services. e. not limited to any of the above categories. 2. 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 3. 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. 4. 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. 5. A factor of production that can be used in any sector of an economy is a(an) a. mobile factor. b. specific factor. c. variable factor. d. import-competing factor. e. export-competing factor. 6. In the specific factors model, a country's production possibility frontier is ________ because of ________. 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
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Mid-semester exam sample 21/02/2012 Shabbir Ahmad
e. a curved
Section 1-Multiple choice
1. Benefits of international trade are a. limited to tangible goods. b. limited to intangible goods. c. limited to all goods but not services. d. limited to services. e. not limited to any of the above categories. 2. 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 3. 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. 4. 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. 5. A factor of production that can be used in any sector of an economy is a(an) a. mobile factor. b. specific factor. c. variable factor. d. import-competing factor. e. export-competing factor. 6. In the specific factors model, a country's production possibility frontier is ________ because of ________. 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
1
Mid-semester exam sample 21/02/2012 Shabbir Ahmad
e. a curved