practicetest_iei3

practicetest_iei3 - Name: _ Class: _ Date: _ Practice Test...

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Class: ___________________ Date: __________ ID: A 4 Practice Test International Economic Issues Chapter 3 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. The Leontief paradox questioned the validity of the theory of: a. Comparative advantage b. Factor endowments c. Overlapping demands d. Absolute advantage ____ 2. Classical trade theory emphasized which of the following as an underlying explanation of the basis for trade? a. Productivities of labor inputs b. Tastes and preferences among nations c. Changes in technologies over time d. Quantities of economic resources ____ 3. Assume that Country A, in the absence of trade, finds itself relatively abundant in labor and relatively scarce in land. The factor endowment theory reasons that with free trade, the internal distribution of national income in Country A will change in favor of: a. Labor b. Land c. Both labor and land d. Neither labor nor land ____ 4. Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada. Trade in autos is: a. Impossible b. Possible c. Highly profitable d. Moderately profitable ____ 5. Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in: a. Income levels among countries b. Tastes and preferences among countries c. Resource endowments among countries d. Labor productivities among countries ____ 6. Hong Kong is relatively abundant in labor, while Canada is relatively abundant in capital. In both countries the production of shirts is relatively more labor intensive than the production of computers. According to the factor endowment theory, Hong Kong will have a(n): a. Absolute advantage in the production of shirts and computers b. Absolute advantage in the production of computers c. Comparative advantage in the production of shirts d. Comparative advantage in the production of computers ____ 7. If Japanese workers receive lower wages in the production of autos than do American workers: a. Japan will have a comparative advantage in the production of autos b. Japan will have an absolute advantage in the production of autos c. Production costs will be lower in Japan than in the U.S. d.
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This note was uploaded on 09/25/2011 for the course ECON 315 taught by Professor Edwardmafoua during the Spring '10 term at SUNY Canton.

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practicetest_iei3 - Name: _ Class: _ Date: _ Practice Test...

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