Fall2010test2A

Fall2010test2A - ECON 465 Fall 2010 Test 2A In my honor I...

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ECON 465: Fall 2010 Test 2A In my honor, I have neither given nor received unauthorized aid on this test: ______________ Name:____________________________________________ Section: Multiple Choice Questions (3 points each) 1. The situation in United States whereby an import good faces a lower tariff if the good comes from a developing country than if the good comes from a developed country is known as __________. a. Generalized System of Preferences treatment b. MFN (or NTR) treatment c. Domestic Content Provisions treatment d. Offshore Assembly Program treatment 2. Given the following information for industry X in country A, and assuming that input Y is imported, that one unit of Y is required for each unit of X, free trade price nominal tariff rate final product X $100 20% input Y (only input to X) $ 80 15% the effective rate of protection (ERP) for industry X is ___ percent. 3. Which one of the following is NOT an assumption made in the standard 2x2x2 Heckscher-Ohlin analysis? a. The production function for a given good is the same in both countries. b. If a particular good is the relatively labor-intensive good at one set of relative factor prices, then it is also the relatively labor-intensive good at any other set of relative factor prices. c. A given relative commodity price ratio, say (P X /P Y ) 1 , can be associated with more than one relative factor price ratio, e.g., say with (w/r) 1 as well as with (w/r) 2 . d. Tastes and preferences (i.e., the community indifference curve maps) are identical in 1
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the two countries.
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