Chap005

Chap005 - Chapter 05 - Introduction to Neoclassical Trade...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 05 - Introduction to Neoclassical Trade Theory Chapter 05 Introduction to Neoclassical Trade Theory Multiple Choice Questions FIGURE 1 1. In Figure 1, a. Output of the B good is the same at point S as at point R b. A plotting of the output combinations along the "diagonal" results in the production- possibilities frontier for this country C . Good B is the labor-intensive good and good A is the capital-intensive good d. Point S has less output of good A than does point R 5-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 05 - Introduction to Neoclassical Trade Theory 2. In Figure 1, a. A movement from point S to point T involves an increase in the capital/labor ratio used in the production of good A b. If the PPF is plotted from the "contract curve" (or "production efficiency locus"), the production combination of goods A and B associated with point R is on the PPF c. If the PPF is plotted from the "contract curve" (or "production efficiency locus"), with good A on the vertical axis and good B on the horizontal axis, the production combination of goods A and B associated with the 0B origin is at the origin of the d. PPF graph E . If the PPF is plotted from the "contract curve" (or "production efficiency locus"), with good A on the vertical axis and good B on the horizontal axis, the production combination of goods A and B associated with point T is further up the vertical axis than the production combination associated with point S 3. Two indifference curves for an individual consumer __________ intersect; two community indifference curves for a country __________. a. Cannot; also cannot intersect B . Cannot; can intersect under some circumstances c. Can; can also intersect under some circumstances d. Can; cannot intersect 4. If, for a consumer, (MUA/PA) is greater than (MUB/PB), then the consumer a. Has an incentive to consume relatively more of good A, which will increase his/her b. MUA C . Has an incentive to consume relatively more of good A, which will decrease his/her d. MUA e. Has an incentive to consume relatively more of good B, which will increase his/her f. MUB g. Has an incentive to consume relatively more of good B, which will decrease his/her h. MUB 5-2
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Chap005 - Chapter 05 - Introduction to Neoclassical Trade...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online