Exam_1__Spring_2010--edited_

Exam_1__Spring_2010--edited_ - Name_ PID_ EC 340 Exam 1...

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Name_______________________ PID_________________________ EC 340 Exam 1 February 11, 2010 Instructions Do not open the exam until instructed to do so. Answer all 37 questions, each has equal weight. Circle the letter of the alternative that best answers the question. You may NOT use calculator, notes, book, or any outside source of information. I gave this exam Spring 2010. There are two questions marked with a red background and white type that cover topics not discussed in class this semester (the effect of trade on real incomes in the short run and implications of economies of scale that are external to the firm). These topics are covered in the text, but I would not put them on the exam because I didn’t even touch on them in class.
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1 1. The opening up of free trade brings gains to: a. all producers. b. producers in export industries. c. producers in import-competing industries. d. workers in import-competing industries. Assume that the market for Backpacks is perfectly competitive. The diagram to the right shows the ordinary demand and supply curves for that characterize the U.S. market for Backpacks. Use the information in this graph to answer questions 2 – 7. 2. In the absence of international trade in Backpacks how many Backpacks will be sold in the United States? a. 165 b. 210 c. 240 3. If the United States could trade Backpacks freely with the rest of the world at a price of $75, how many Backpacks would be produced in the United States? a. 30 b. 45 c. 75 d. 165 e. 210 f. 240 g. It depends on foreign demand for Backpacks.
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2 4. If the United States could trade Backpacks freely with the rest of the world at a price of $75, how many Backpacks would be purchased in the United States? a. 30 b. 45 c. 75 d. 165 e. 210 f. 240 g. It depends on foreign supplies of Backpacks. 5. If the United States could trade Backpacks freely with the rest of the world at a price of $75, the United States would import __________ Backpacks and export __________ Backpacks. a. 240; 165 b. 0; 165 c. 75; 0 d. 240; 0 e. 0;75 6. If the United States could trade Backpacks freely with the rest of the world at a price of $75, the surplus of those who would have purchased backpacks in autarky __________ by ____________. a. increases; $90 X 210 b. increases; $75 X 210 c. increases; $15 X 210 d. increases; $75 X 210 e. increases; ½ X $15 X 30 f. decreases; ($15 X 210) + ( ½ X $15 X 30) g. decreases; ½ X $15 X 30 h. decreases; $15 X 165 i. decreases; $15 X 210 7. If the United States could trade Backpacks freely with the rest of the world at a price of $75, the surplus of those who continue to sell Backpacks __________ by ____________. a. increases; $90 X 210 b. increases; $75 X 210 c. increases; $15 X 210 d. increases; $75 X 210 e. increases; ½ X $15 X 30 f. decreases; ($15 X 210) + ( ½ X $15 X 30) g. decreases; ½ X $15 X 30 h. decreases; $15 X 165 i. decreases; $15 X 210
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3 Suppose that the U.S. imports 100 barrels of oil from the rest of the world at a price of $80 per barrel. Further suppose that the price of oil in the U.S. would be $200 per
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Exam_1__Spring_2010--edited_ - Name_ PID_ EC 340 Exam 1...

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