E452exs1F09

E452exs1F09 - 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 Fall 2009 -1- WORLD TRADE 1. With which trading partner does the United States have the largest trading volume? a. China b. Mexico c. Canada d. Germany e. Japan 2. ________ as the second largest trading partner of the United States? a. Mexico recently replaced Canada b. Canada recently replaced Mexico c. Mexico recently replaced China d. China recently replaced Canada e. China recently replaced Mexico 3. What is the largest destination for Texas exports? a. China b. Mexico c. Canada d. Germany e. Japan 4. Which state exports the most (biggest dollar amount)? a. Alaska b. Texas c. California d. Florida e. New York
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-2- 5. For EU countries, a graph of percent of US trade with the EU against share of EU gross domestic product (GDP) looks like a a. Horizontal line at 100% b. Vertical line at 100% c. Line with (upward) slope of one d. Line with (downward) slope of negative one e. No clear pattern - could even be U-shaped 6. What is NOT a reason why US trade with Canada can be similar in magnitude to US trade with the EU when Canada is less then 10% of EU GDP in size? a. Canadian US Free Trade Agreement (CUSFTA) b. Size does not matter c. Greater cultural affinity with Canada than with EU d. Shorter distance to Canada than to EU e. EU concerns over genetically modified crops 7. What measure of the importance of trade do we use when comparing the US and UK now to earlier periods? a. Imports b. Exports c. Trade volume, which is imports plus exports d. Trade volume as a percent of GDP e. GDP 8. In 2001, about 65% of exports from developing countries were in a. Agriculture b. Services c. Mining d. Manufactures e. Non-traded goods
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-3- RICARDIAN MODEL 9-12. Machinery and chemicals are produced with labor. Suppose the free trade relative price of chemicals to machinery equals the autarky relative price of chemicals to machinery in China, which is higher than the autarky price of chemicals to machinery in Canada. 9. The opportunity cost of machinery in terms of chemicals is ________ in Canada compared to China. a. Higher b. Lower c. The same d. Higher or the same e. Lower or the same 10. China has comparative advantage in a. Only chemicals b. Only machinery c. Both chemicals and machinery d. Neither chemicals nor machinery e. Cannot tell from the information provided 11. Under free trade, China exports a. Only chemicals b. Only machinery c. Both chemicals and machinery d. Neither chemicals nor machinery e. Cannot tell from the information provided 12. Does China strictly gain from trade in this situation? a. Definitely yes b. Definitely no c. Possibly, but only if produces just chemicals d. Possibly, but only if produces just machinery e. Possibly, but only if produces both goods
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-4- 13-16 China and Mexico engage in free trade in grapes and pears, which are produced with labor. Suppose under free trade that Mexico produces only grapes.
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This note was uploaded on 02/13/2012 for the course ECON 452 taught by Professor Vacaflores during the Spring '06 term at Texas A&M.

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E452exs1F09 - Name FIRST MIDTERM EXAM Economics 452...

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