Exam%20_2%20ANSWERS%20_Spring%202009_

Exam%20_2%20ANSWERS%20_Spring%202009_ - Name: _ (Last name,...

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Spring 2009 1/18 Name: _________________________ (Last name, first name) SID: _________________________ Economics C181/Environmental Economics C181 International Trade Professor Steven Wood Spring 2009 Exam #2 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 3:30 p.m. on May 21, 2009. _____________________________ 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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2/18 A. Multiple Choice Questions . Circle the letter corresponding to the best answer (3 points each.) 1. As a result of international trade, specialization in the Ricardian model tends to be: a. Complete with both constant costs and with increasing costs. b. Complete with constant costs and incomplete with increasing costs. c. Incomplete with constant costs and complete with increasing costs. d. Incomplete with both constant costs and increasing costs. 2. If a small country places a tariff on its imports it will: a. Decrease that country’s economic welfare. b. Increase that country’s economic welfare. c. Have no effect on that country’s economic welfare. d. Have an indeterminate effect on that country’s economic welfare. 3. If poor countries that receive international aid from rich countries have higher marginal propensities to consume for each and every product than do the rich countries, then such aid will: a. Worsen the rich countries’ terms of trade. b. Improve the rich countries’ terms of trade. c. Have no affect on the world terms of trade. d. Improve the terms of trade of both the donor and recipient countries. 4. If Slovenia is a small country in world trade terms, then if it imposes a large tariff on its imports, this would: a. Worsen its terms of trade. b. Improve its terms of trade. c. Have no effect on its terms of trade. d. Have an indeterminate effect on its terms of trade. 5. International trade based on external economies of scale in both countries is likely to be carried out by a: a. Relatively small number of monopolistically competing firms. b. Relatively large number of monopolistically competing firms. c.
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This note was uploaded on 11/13/2009 for the course ECON 181 taught by Professor Kasa during the Spring '07 term at University of California, Berkeley.

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Exam%20_2%20ANSWERS%20_Spring%202009_ - Name: _ (Last name,...

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