4431vMidterm

4431vMidterm - ECON 4431V: International Trade (Honors)...

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ECON 4431V: International Trade (Honors) Spring 2005 Midterm Examination March 23, 2005 INSTRUCTIONS: This exam has 100 points and 4 bonus points. Answer the questions (the bonus questions are optional) in the provided blue books. YOU SHOULD ANSWER: PART A: ANSWER ALL QUESTIONS (30 points, 2.5 points per question) PART B: ANSWER THREE OUT OF FOUR QUESTIONS (69 points, 23 points per question) Don’t forget to write your name in the blue book (It counts for 1 point!) . This is a closed book exam. You have 75 minutes (1 hour and 15 minutes) to finish this exam. GOOD LUCK! 1
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PART A: MULTIPLE QUESTIONS (30 points total, 2.5 points each) 1. Given the following information: Unit Labor Requirements Cloth Widgets Home 10 20 Foreign 60 30 a. Neither country has a comparative advantage. b. Home has a comparative advantage in cloth. c. Foreign has a comparative advantage in cloth. d. Home has a comparative advantage in widgets. e. Home has a comparative advantage in both products. 2. Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan if a. U.S. labor productivity equaled 40 units per hour and Japan’s 15 units per hour. b. U.S. productivity equaled 30 units per hour whereas Japan’s was 20. c. U.S. labor productivity equaled 20 and Japan’s 30. d. U.S. labor productivity equaled 15 and Japan’s 25 units per hour. e. None of the above. 3. International trade has strong effects on income distributions. Therefore, international trade a. is beneficial to everyone in both trading countries. b. will tend to hurt one trading country. c. will tend to hurt some groups in each trading country. d. will tend to hurt everyone in both countries. e. will be beneficial to all those engaged in international trade. 2
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4. If Australia has relatively more land per worker, and Belgium has rela- tively more capital per worker, then if trade were to open up between these two countries, a. the relative price of the capital-intensive product would rise in Aus- tralia b. the world price of the land-intensive product would be higher than it had been in Belgium. c. the world price of the land intensive product would be higher than it had been in Australia. d. the relative price of the land intensive product would rise in Belgium. e. None of the above. 5. In the Specific Factors model, each of the two sectors a. employs the same factors used by the other. b. employs different factors than those employed in the other. c. employs a fixed coefficient production function. d. shares one factor of production with the other sector.
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This note was uploaded on 02/23/2011 for the course ECON 301 taught by Professor S.chiu during the Spring '11 term at HKU.

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4431vMidterm - ECON 4431V: International Trade (Honors)...

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