Econ QUIZ 10 - QUIZ 10 _ VERSION 1 1. If a country allows...

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QUIZ 10 VERSION 1 ____ 1. If a country allows trade and the domestic price of a good is higher than the world price, a. the country will become an exporter of the good. b. the country will become an importer of the good. c. the country will neither export nor import the good. d. additional information about demand is needed to determine whether the country will export or import the good. ____ 2. If Canada exports cars to France and imports cheese from Switzerland, a. Canada has a comparative advantage in producing cars, and Switzerland has a comparative advantage in producing cheese. b. Canada has a comparative advantage in producing cheese, and Switzerland has a comparative advantage in producing cars. c. Canada and France would both be better off if they each produced cars and cheese. d. Comparative advantage cannot be determined without knowing absolute prices. ____ 3. When a country allows trade and becomes an exporter of a good domestic producers a. gain and domestic consumers lose. b. lose and domestic consumers gain. c. and domestic consumers both gain. d. and domestic consumers both lose. ____ 4. When a country allows trade and becomes an exporter of a good, which of the following would NOT be true? a. The price paid by domestic consumers of the good increases. b. The price received by domestic producers of the good increases. c. The losses of domestic consumers exceed the gains of domestic producers. d. The gains of domestic producers exceed the losses of domestic consumers. ____ 5. Benefits from free trade include each of the following EXCEPT a. increased variety of goods. b. lower costs because of economies of scale. c. enhanced flow of ideas. d. reduced competition. ____ 6. 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 each. d. export yo-yo's and the price in Taiwan will be $3.50 each. ____ 7. A budget constraint a. shows the prices that a consumer chooses to pay for products he consumes. b. shows the purchases made by consumers. c. shows the consumption bundles that a consumer can afford. d. represents the bundles of consumption that makes a consumer equally happy.
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____ 8. Assume that a college student spends her income on Coke and Snickers. The price of a Snickers candy bar is $0.50, and a can of Coke is $0.75. If she has $20 of income, she could choose to consume a. 10 Snickers bars and 20 cans of Coke. b. 15 Snickers bars and 18 cans of Coke. c. 22 Snickers bars and 14 cans of Coke. d.
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This note was uploaded on 10/11/2010 for the course ECONOMICS ECON 1B03 taught by Professor Holmes during the Fall '08 term at McMaster University.

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Econ QUIZ 10 - QUIZ 10 _ VERSION 1 1. If a country allows...

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