Chap007

Chap007 - Chapter 07 - Offer Curves and the Terms of Trade...

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Chapter 07 - Offer Curves and the Terms of Trade Chapter 07 Offer Curves and the Terms of Trade Multiple Choice Questions 1. A "small" country in international trade is defined as a. A country that can influence its volume of trade b. A country that can influence its terms of trade c. A country that cannot influence its volume of trade D . A country that cannot influence its terms of trade 2. In deriving an offer curve for a country, if a higher price of exports/price of imports leads to a reduction in the quantity of exports which the country is willing to supply, then, in this range of the offer curve, the offer curve is said to be __________. a. Inelastic b. Unit-elastic c. Elastic D . Inelastic, unit-elastic, or elastic - cannot be determined without more information 3. If country I is trading in the inelastic range of country II's offer curve, then the imposition of a tariff by country I, which still leaves country I in the inelastic range of country II's curve, will (assuming no retaliation) lead to __________ in country I's terms of trade and to __________ in the volume of imports of country I. a. A deterioration; a decrease b. A deterioration; an increase c. An improvement; a decrease D . An improvement; an increase 7-1
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Chapter 07 - Offer Curves and the Terms of Trade 4. In an offer curve graph with country A's exports on the horizontal axis and country B's exports on the vertical axis, which one of the following events will shift or pivot country A's offer curve to the right? a. The imposition of a tariff by country B b. A decrease in demand by A for B's products C . A tariff reduction by A on B's products d. An increase in demand by B for A's products 7-2
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This note was uploaded on 11/27/2009 for the course ECON 421 taught by Professor Macphee,c during the Spring '08 term at UNL.

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Chap007 - Chapter 07 - Offer Curves and the Terms of Trade...

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