Practice Multiple Choice for Exam II

Practice Multiple Choice for Exam II - Practice Multiple...

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Practice Multiple Choice for Exam II Chapter 9 1. The nation of Waterland forbids international trade. In Waterland, you can obtain a computer by trading 2 bicycles. In other countries, you can obtain a computer by trading 3 bicycles. These facts indicate that a. if Waterland were to allow trade, it would export computers. b. Waterland has an absolute advantage, relative to other countries, in producing computers. c. Waterland has a comparative advantage, relative to other countries, in producing bicycles. d. All of the above are correct. 2 If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price, a. the country will be an exporter of the good. b. the country will be an importer of the good. c. the country will be neither an exporter nor an importer of the good. d. Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither. 3. The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become a. better off, its producers of fish will become better off, and on balance the citizens of Denmark will become better off. b. worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off. c. worse off, its producers of fish will become better off, and on balance the citizens of Denmark will become worse off. d. better off, its producers of fish will become worse off, and on balance the citizens of Denmark will become better off.
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4. A tariff on a product a. is a direct quantitative restriction on the amount of a good that can be imported. b. increases the domestic quantity supplied. c. increases domestic consumer surplus. d. All of the above are correct. Chapter 10
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Practice Multiple Choice for Exam II - Practice Multiple...

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