econ353-2009fall-ps4 - METU/FEAS Econ 353 Hakan Ercan Tuna...

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METU/FEAS 24.11.09 Econ 353 Hakan Ercan Tuna GONULDAS Gorkem KARABAYIR PROBLEM SET 4 PART A: MULTIPLE CHOICE QUESTIONS Answer the following two questions according to the figure given below: 1) Which of the following would not cause a shift of B's offer curve from OC B to OC' B ? a) the imposition of an import tariff levels by Country B. b) an increase in the country's income. c) a decreased demand for imported products d) All of the above would cause such a shift. 2) Which of the following could cause a shift of A's offer curve from OC A to OC' A ? a) a lowering of import tariff levels by Country A. b) a decrease in the country's income. c) a decreased interest in imported products. d) all of the above 3) If Country I becomes less interested in international trade while Country II simultaneously becomes more interested, we would expect (assuming both countries are operating on the elastic portions of their offer curves) a) an increase in the volume of trade and a deterioration of Country I's terms of trade. b) an ambiguous change in the volume of trade and an improvement of Country I's terms of trade. c) a decrease in the volume of trade and a deterioration of Country I's terms of trade. d) an ambiguous change in the volume of trade and a deterioration of Country I's terms of trade. 1
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Use the following diagram to answer questions 4-5-6. 4) If the terms of trade are given by the slope of the line marked TOT 2 , on the international market there will be a) an excess demand for good Y and an excess supply for good X. b) an excess demand for both X and Y. c) an excess demand for good X and an excess supply of good Y d) none of the above. 5) If the terms of trade are given by the slope of the line marked TOT
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This note was uploaded on 05/26/2010 for the course ECON 353 taught by Professor Erol during the Spring '10 term at Middle East Technical University.

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econ353-2009fall-ps4 - METU/FEAS Econ 353 Hakan Ercan Tuna...

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