Hw1 - ECN 162 International Economic Relations Ina...

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1 ECN 162 International Economic Relations University of California - Davis Ina Simonovska Fall 2009 Assignment 1 (Maximum Points: 100) Due Tuesday, October 6, at the beginning of class. Multiple-Choice Questions (Each question is worth 3 points) Answer questions 1-3 based on the following PPF. 1. The relative price of S (in terms of T), P S /P T , is (a) 2. (b) ½ . (c) 500. (d) 1000. 2. The relative price of T (in terms of S), P T /P S , is (a) 2. (b) ½ . (c) 500. (d) 1000. 3. If the relative price of T were to increase, then the price line would (a) shift out in a parallel fashion. (b) shift in a parallel fashion. (c) become steeper. (d) become flatter. 4. In autarky, when a country maximizes its utility, its consumption point is (a) below the production possibility frontier. (b) on the production possibility frontier. (c) above the production possibility frontier. (d) cannot tell without more information.
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2 Answer questions 5-9 based on the following diagram of a country in international trade equilibrium EB represents the country’s PPF. FB represents the terms of trade line. 5. This country has comparative advantage in good
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Hw1 - ECN 162 International Economic Relations Ina...

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