ECON EXAM #3

ECON EXAM #3 - Study guide for Exam 3 [Covering chapters...

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Unformatted text preview: Study guide for Exam 3 [Covering chapters 9,12,13,14, and 15] Econ 2100 microeconomics Fall 2010 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. With which of the Ten Principles of Economics is the study of international trade most closely connected? a. People face tradeoffs. b. Trade can make everyone better off. c. Governments can sometimes improve market outcomes. d. Prices rise when the government prints too much money. ____ 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. If the world price of textiles is higher than Vietnam’s domestic price of textiles without trade, then Vietnam a. should import textiles. b. has a comparative advantage in textiles. c. should produce just enough textiles to meet its domestic demand. d. should refrain altogether from producing textiles. ____ 4. When the nation of Duxembourg allows trade and becomes an importer of software, a. residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. b. residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg falls. c. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg rises. d. residents of Duxembourg who produce software become better off; residents of Duxembourg who buy software become worse off; and the economic well-being of Duxembourg falls. ____ 5. When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans, a. this is an indication that the world price of soybeans exceeds the nation’s domestic price of soybeans in the absence of trade. b. this is an indication that the nation has a comparative advantage in producing 1 soybeans. c. the nation’s consumers of soybeans become worse off and the nation’s producers of soybeans become better off. d. All of the above are correct. Figure 9-1 The figure illustrates the market for wool in New Zealand. Domestic supply Domestic demand World price A B C D F G H 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Quantity 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 Price ____ 6. Refer to Figure 9-1 . With trade, New Zealand will a. export 11 units of wool....
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This note was uploaded on 01/20/2012 for the course ECON 2100 taught by Professor Goodwin during the Spring '07 term at Kennesaw.

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ECON EXAM #3 - Study guide for Exam 3 [Covering chapters...

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