Practice Exam 2 Key F10

Practice Exam 2 Key - ECO369 International Economic Issues GVSU Wei Sun PRACTICE EXAM 2 Answer Key Total 50 points I Multiple Choice Questions

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ECO369 International Economic Issues GVSU, Wei Sun PRACTICE EXAM 2 Answer Key Total: 50 points I. Multiple Choice Questions. Write your answers clearly in the boxes below. Only answers in the boxes will be graded. (15 questions, 2 points each, total: 30 points) 1. A consumer pays $5000 for a 5-year used Honda Civic car and realizes a consumer surplus of $1000. How does this consumer value the car? a) $5000 b) $6000 c) $4000 d) More information is needed. 2. Producer surplus is defined to be a) the difference between the market price and the producer’s marginal cost. b) the difference between the maximum price a consumer is willing to pay and the actual price he/she pays for the good. c) the total market value of the good given its price and market equilibrium quantity. d) the cost the producer incurs in producing the product. 3. Which of the following statements regarding free trade is true? a) Under free trade, exporting countries always gain at the expense of importing countries. b) Under free trade, importing countries always gain at the expense of exporting countries. c) Under free trade, exporting countries and importing countries will both gain. d) Free trade is a zero sum game, that is, one party wins and the other loses. 4. The international trade negotiations of the GATT that created the WTO in 1995 was known as the a) Doha Round b) Tokyo Round c) Uruguay Round d) Qatar Round 1
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Questions 5 to 8 are based on the following figure. 5. Refer to the figure above. What are the autarky price and quantity, respectively, for this economy? a) $15 and 12,000 units. b) $10 and 60,000 units. c) $25 and 25,000 units.
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This note was uploaded on 12/14/2010 for the course ECO 369 taught by Professor Sun during the Fall '10 term at Grand Valley State University.

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Practice Exam 2 Key - ECO369 International Economic Issues GVSU Wei Sun PRACTICE EXAM 2 Answer Key Total 50 points I Multiple Choice Questions

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