Answers to Midterm 2, Econ 330, fall 2007, ver 1

Answers to Midterm 2, Econ 330, fall 2007, ver 1 - Exam...

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Exam Name___________________________________ Please write all your answers on the examination itself. DO NOT USE SCANTRON SHEETS. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The concept ʺ terms of trade ʺ means A) the price conditions bargained for in international markets. B) the amount of exports sold by a country. C) the price of a country ʹ s exports divided by the price of its imports. D) the quantities of imports received in free trade. E) None of the above. 1) 2) Tastes of individuals are represented by A) the isovalue line. B) the production function. C) the production possibility frontier. D) the indifference curve. E) None of the above. 2) 3) Export - biased growth in the home country will A) worsen the terms of trade of in the foreign country (the trade partner). B) decrease economic welfare in home country. C) trigger anti - bias regulations of the WTO. D) improve the terms of trade of the foreign country. E) improve the terms of trade of home country. 3) 4) During the 19th Century, economic growth of the major trading countries was biased toward manufactures and away from food. The less developed countries of that time were net exporters of food. From this information, we would expect to have observed A) improving (rising) terms of trade for the less developed countries. B) falling terms of trade for the less developed countries. C) no change at all in the terms of trade of the less developed countries. D) a decrease in the relative price of food. E) None of the above. 4) 5) External economies of scale arise when the cost per unit A) rises as the industry grows larger. B) falls as the industry grows larger but rises as the average firm grows larger. C) falls as the average firm grows larger. D) remains constant. E) None of the above. 5) A 1
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6) If a there are no international loans or capital flows, then if a country ʹ s terms of trade improve, we would find that A) the quantity of its exports equals that of its imports. B) the value of its exports becomes less than that of its imports. C) the value of its exports exceeds the value of its imports. D) the value of its exports exactly equals that of its imports. E) None of the above. 6) 7) Internal economies of scale arise when the cost per unit A) rises as the industry grows larger. B) falls as the industry grows larger. C) rises as the average firm grows larger. D) falls as the average firm grows larger. E) None of the above. 7) 8) The simultaneous export and import of widgets by the United States is an example of A) increasing returns to scale. B) imperfect competition. C) intra - industry trade. D) inter - industry trade. E) None of the above.
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Answers to Midterm 2, Econ 330, fall 2007, ver 1 - Exam...

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