E452exs1S11

E452exs1S11 - Name FIRST MIDTERM EXAM Economics 452...

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N a m e F IRST M IDTERM E XAM Economics 452 International Trade Theory and Policy Spring 2011 -1- WORLD TRADE 1. What is true for the United States with most of its largest trading partners? a. Trade balance is positive so we have a trade surplus b. Trade balance negative so we have a trade deficit c. Value of our imports exceeds the value of our exports d. Value of our exports equals the value of our imports e. b and c 2. Total value of US imports from and exports to Canada (trade volume) has been around ______ in 2005-2010. a. $40-55 million b. $400-550 million c. $40-55 billion d. $400-550 billion e. $40-55 trillion 3. How have Texas exports changed in the last few years? a. Shrank 2007-8, shrank 2008-9 & grew 2009-10 b. Shrank 2007-8, grew 2008-9 & grew 2009-10 c. Grew 2007-8, shrank 2008-9 & grew 2009-10 d. Grew 2007-8, grew 2008-9 & grew 2009-10 e. Grew 2007-8, grew 2008-9 & shrank 2009-10 4. If Texas were a nation, it would rank in the ________ exporters. a. Top 5 b. Top 10 c. Top 20 d. Top 100 e. Top 200
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-2- 5. The gravity model claims that the value of trade between two countries _____ with the GDP of each country and _____ with the distance between them. a. increases, increases b. increases, decreases c. increases, stays the same d. decreases, increases e. decreases, decreases 6. That trade with British Columbia as a percentage GDP is 1.9 for Ontario versus 0.2 for Ohio suggests that the a. border seems to cause a substantial reduction in trade b. Canadian-US Free trade agreement promoted trade c. majority of Canadians live near the US border d. two countries share a common language and heritage e. c and d 7. That trade as a percentage of GDP is currently around 25-30% in the United States versus 40-45% in 1870-1910 in the United Kingdom suggests that for the United States today international trade is a. more important than for the UK before 1910 b. as important as for the UK before 1910 c. less important than for the UK before 1910 d. as important as for Denmark today e. more important than for the UK or Denmark today 8. Improvements in modern transportation and communication have caused distance to a. matter more for trade volumes than ever before b. matter less and less for trade volumes c. become irrelevant to trade volumes d. b and c e. a and c
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-3- RICARDIAN MODEL 9-12. Laptops and paper towels are produced with labor. Suppose the relative price of paper towels to laptops under free trade is less than the opportunity cost of paper towels in terms of laptops in Taiwan, whose only trading partner is the United States. 9. In autarky (before trade) in Taiwan, the wage earned when making laptops is _______ the wage earned when making paper towels. a. Higher than b. Lower than c. The same as d. Higher than or the same as e. Lower than or the same as 10. The United States imports a. Only laptops b. Only paper towels c. Both laptops and paper towels d. Neither laptops paper towels e. Cannot tell from the information provided 11. Does the United States gain from trade?
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This note was uploaded on 02/13/2012 for the course ECON 452 taught by Professor Vacaflores during the Fall '06 term at Texas A&M.

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E452exs1S11 - Name FIRST MIDTERM EXAM Economics 452...

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