week 5 - Principles of Economics Problem Set for Week 5...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Principles of Economics Problem Set for Week 5 Due: online 10pm April.6, Tuesday I. Choose one answer that fits the best. (4 points each for questions 1-14, 3 points each for questions 15-27, total 95 points) 1. If the United States exports cars to France and imports cheese from Switzerland, a. the United States has a comparative advantage in producing cars, and Switzerland has a comparative advantage in producing cheese. b. the United States has a comparative advantage in producing cheese, and Switzerland has a comparative advantage in producing cars. c. the United States and France would both be better off if they each produced cars and cheese. d. Comparative advantage cannot be determined without knowing absolute prices. 2. When a country allows trade and becomes an importer of a good, which of the following would NOT be true? a. The gains of domestic consumers exceed the losses of domestic producers. b. The losses of domestic producers exceed the gains of domestic consumers. c. The price paid by domestic consumers of the good decreases. d. The price received by domestic producers of the good decreases. 3. The world price of yo- yo’s is $4.00 each. The pre -trade price of yo- yo’s in Taiwan is $3 .50 each. If Taiwan allows trade in yo- yo’s we know that Taiwan will a. import yo- yo’s and the price in Taiwan will be $4.00 each. b. import yo- yo’s and the price in Taiwan will be $3.50 each. c. export yo- yo’s and the price in Taiwan will be $4.00 e ach. d. export yo- yo’s and the price in Taiwan will be $3.50 each. 4. A tariff is a tax placed on a. exported goods that lowers the domestic price below the world price. b. exported goods that keeps the domestic price the same as the world price. c. imported goods that lowers the domestic price below the world price. d. imported goods that raises the domestic price above the world price. 5. Chad's maple tree hangs over Amy's fence and drops leaves into her yard each autumn. The benefit to Chad of lower utility bills is about $300. The cost to Amy of having her lawn cleaned and reseeded is $350. Based on the Coase theorem a. Amy should pay Chad $325 to cut down the tree.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/23/2010 for the course ECONOMICS 2312 taught by Professor William during the Spring '09 term at 東京大学.

Page1 / 5

week 5 - Principles of Economics Problem Set for Week 5...

This preview shows document pages 1 - 2. Sign up to view the full document.

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