Econ 1B03 Practice Exam

Econ 1B03 Practice Exam - PRACTICE EXAM 120 QUESTIONS...

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PRACTICE EXAM DECEMBER 2007 120 QUESTIONS ANSWER KEY AT THE END OF EXAMINATION. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Use the table below to answer the following question(s). Table 33.3 Country Units of Labour per Unit of Food Output Units of Labour per Unit of Cloth Output Home 2 6 Foreign 6 8 1) Refer to Table 33.3. In order for the home country to gain from trade, which product must it import from the foreign country? 1) _________ A) Food. B) Cloth. C) Neither product. D) Either product. E) Both products. Use the figure below to answer the following question(s). Figure 33.1 Two countries, Partyland and Cowabunga, produce only beer and pizza and have the production possibilities frontiers shown below. 2) Refer to Figure 33.1. The opportunity cost of 1 unit of beer in Partyland is ________, and the opportunity cost of 1 unit of beer in Cowabunga is ________. 2) _________ A) 1 pizza; 1 pizza B) dependent on where on the PPF we measure it; dependent on where on the PPF we measure it C) 3 pizzas; 1 pizza D) 100 pizzas; 25 pizzas E) 1 pizza; 1/3 pizza
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3) Refer to Figure 33.1. If trade occurs between Partyland and Cowabunga, 3) _________ A) Partyland will supply pizzas, and Cowabunga will supply beers. B) Cowabunga will supply both pizzas and beers, because they have a comparative advantage in both. C) Partyland will supply both pizzas and beers, because they have a comparative advantage in both. D) there will be a lot of drunk turtles. E) Partyland will supply beers, and Cowabunga will supply pizzas. 4) Complete the following sentence. A tariff is a 4) _________ A) tax on an imported good or service. B) restriction on the quantity of imported goods. C) subsidy on an imported good. D) tax on an exported good or service. E) subsidy on an exported good. 5) One goal of the General Agreement on Tariffs and Trade is to 5) _________ A) raise Canada's share of world trade. B) maximize the tariff revenue earned by governments. C) maximize the profit to producers by imposing quotas on manufactured goods. D) encourage bilateral trade agreements between countries. E) reduce tariff barriers to trade. 6) If Canada imposes a tariff on imported shoes, an increase in the domestic demand for shoes will result in 6) _________ A) a rise in the domestic price and no change in the quantity imported. B) no change in the domestic price or in the quantity imported. C) a rise in the domestic price and an uncertain change in the quantity imported. D) no change in the domestic price, but an increase in the quantity imported. E) a rise in the domestic price and in the quantity imported. 7)
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This note was uploaded on 08/04/2008 for the course ECON 1B03 taught by Professor Hannahholmes during the Fall '08 term at McMaster University.

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Econ 1B03 Practice Exam - PRACTICE EXAM 120 QUESTIONS...

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