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Econ 181 1st midterm Sol

# Econ 181 1st midterm Sol - Name(Last name first name SID...

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Fall 2008 1/9 Name: _________________________ (Last name, first name) SID: _________________________ UGBA 118 International Trade Professor Steven Wood Fall 2008 Exam #1 ANSWERS Please sign the following oath: The answers on this test are entirely my own work. I neither gave nor received any aid while taking this test. I will not discuss the questions on this test until after 2:00 p.m. on October 16, 2008. _____________________________ Signature Any test turned in without a signature indicating that you have taken this oath will be assigned a grade of zero. Graph Instructions When drawing diagrams, the following rules apply: 1. Completely , clearly and accurately label all axis, lines, curves, and equilibrium points. 2. The original diagram and equilibrium points MUST be drawn in black or pencil. 3. The first shift of any line(s) and the new equilibrium points MUST be drawn in red. 4. The second shift of any line(s) and new equilibrium points MUST be drawn in blue Do NOT open this test until instructed to do so. Good Luck!

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Fall 2008 2/9 A. Multiple Choice Questions . Circle the letter corresponding to the best answer (3 points each; total of 30 points.) 1. The gravity model offers a logical explanation for the fact that: a. International trade between Asia and the Euro region has growth faster than intra-Euro region trade. b. International trade in services has grown faster than trade in manufactured goods. c. International trade in manufactured goods has grown faster than trade in agricultural products. d. Intra-Asian trade exceeds the international trade of Asia with the U.S. 2. The gravity model explains why: a. International 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. Trade in manufactured goods is more important than trade in services between neighboring countries. 3. A country engaged in international trade based on comparative advantage gains from trade because it: a. Is producing exports indirectly more efficiently than it could alternatively. b. Is producing imports indirectly more efficiently than it could domestically. c. Is producing exports using fewer labor units. d. Is producing imports indirectly using fewer labor units. 4. In a 2-product, 2-country world, international trade can lead to increases in: a. Consumer welfare only if the world output of both products is increased. b. The world output of both products and consumer welfare in both countries. c. The world output of both products but not consumer welfare in both countries. d. Consumer welfare in both countries but not the world output of both products. 5.
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Econ 181 1st midterm Sol - Name(Last name first name SID...

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