Exam I Blue

Exam I Blue - QUESTIONS 1 4 ARE BASED UPON THE TRADE...

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nity costs are 1/2 Bottle of Wine per Pound of Cheese and 2 Pounds of Cheese per Bottle of Wine. unity costs are 1/3 Bottle of Wine per Pound of Cheese and 3 Pounds of Cheese per Bottle of Wine. es on the wealthy. Unlike the other three statements shown here, we cannot test the truth of the statement against facts of experience. D A C Guns Butter B Short Run Tradeoff between inflation and unemployment. Butter Guns C: A: Butter Guns D: B: Butter Guns Butter Guns s frontier is not affected by changes in consumer preferences. lation does not imply causation. France Spain Pounds of “Cheese” Loaves of "Bread" X "Cheese" (Pounds) QUESTIONS 1 - 4 ARE BASED UPON THE TRADE SITUATION BELOW Italy and Germany produce two goods: Wine and Cheese. The hours of labor required to produce these goods are given in the table below: Wine (Hours/Bottle) Cheese (Hours/Pound Italy 4 2 Germany 3 1 1. In the production of Cheese, Italy has: a) an absolute advantage. c) both an absolute and a comparative advantage. b) a comparative advantage. d) neither an absolute nor a comparative advantage. 2. In the production of Wine, Germany has: a) an absolute advantage. c) both an absolute and a comparative advantage. b) a comparative advantage. d) neither an absolute nor a comparative advantage. 3. We would expect opposition to a free trade agreement between Italy and Germany to come from: a) producers of wine in Italy c) producers of wine in Germany b) consumers of cheese in Italy d) consumers of wine in Germany 4. We would expect the terms of trade to lie between __ and __ bottles of wine per pound of cheese. a) 2; 3 b) 1/2; 3/4 c) 4/3; 2 d) 1/3; 1/2 5. The author of the textbook for this course, N. Gregory Mankiw, worked in the administration of President George W. Bush from 2003 to 2005. Specifically, he served as the: a) Secretary of Commerce c) Chairman of the Council of Economic Advisers b) Secretary of the Treasury d) Chairman of the Federal Reserve System 6. A normative statement describes how the world a) was in the past c) will be in the future b)
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This test prep was uploaded on 04/07/2008 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue.

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Exam I Blue - QUESTIONS 1 4 ARE BASED UPON THE TRADE...

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