Question 1

How successful has import-substituting industrialization been?

Accepted Answer

There is evidence in favor and against i

Question 2

If exporters of a primary product form an international cartel, then:

Accepted Answer

A) the importing countries will be forced to reduce the barriers on their imports. 
B) the world supply of the primary product will expand substantially. 
C) the world efficiency will increase. 
D) output of the primary product will fall and its price will rise. 
A) the importing countries will be forced to reduce the barriers on their imports. 
B) the world supply of the primary product will expand substantially. 
C) the world efficiency will increase. 
D) output of the primary product will fall and its price will rise.

Question 3

The world prices of the primary products are less likely to decline if:

Accepted Answer

A) the government of the countries that export primary products subsidize the production of these primary products. 
B) the production of the primary commodities is increased by a greater proportion than the increase in their demand. 
C) the exporters of the primary products form international cartels. 
D) the major importers of the primary products impose high tariff barriers on their imports. 
A) the government of the countries that export primary products subsidize the production of these primary products. 
B) the production of the primary commodities is increased by a greater proportion than the increase in their demand. 
C) the exporters of the primary products form international cartels. 
D) the major importers of the primary products impose high tariff barriers on their imports.

Question 4

If a cartel is functioning at full effectiveness, then as a cartel's marginal cost of production increases, the cartel's profit maximizing price:

Accepted Answer

A) decreases. 
B) also increases. 
C) remains constant. 
D) initially decreases and then increases. 
A) decreases. 
B) also increases. 
C) remains constant. 
D) initially decreases and then increases.

Question 5

Which of the following factors is most likely to result in a decline in the relative price of the primary products in the world market?

Accepted Answer

A) Increase in imports of primary products 
B) Development of synthetic substitutes for primary products 
C) Rapid increase in world population 
D) Increase in the prices of inputs used in producing primary products 
A) Increase in imports of primary products 
B) Development of synthetic substitutes for primary products 
C) Rapid increase in world population 
D) Increase in the prices of inputs used in producing primary products

Question 6

Why has emphasizing new exports of less-skilled-labor-intensive manufactured goods to industrialized countries been difficult for developing countries?

Accepted Answer

In part, the industrialized countries ha

Question 7

Growth rates have been consistently lower for developing counties than for developed countries.

Accepted Answer

A) True 
 B)False

Question 8

"The countries which have implemented policies that emphasize exporting have been more successful than the countries practicing ISI." Does theory suggest that this must be the case? That is, theoretically, is there no support for ISI, or are the necessary conditions for successful ISI not being met?

Accepted Answer

Theory provides several reasons that ISI

Question 9

Evidence suggests that depth and speed of reforms did not matter for the success of transition in the formerly socialist countries.

Accepted Answer

A) True 
 B)False

Question 10

Studies comparing growth rates of countries practicing ISI with growth rates of countries using policies that emphasize expansion of exports have found:

Accepted Answer

A) little difference in growth rates between the two groups of countries. 
B) higher growth rates in those countries using policies that emphasize export expansion. 
C) higher growth rates in those countries practicing ISI. 
D) no evidence that either type of policy has been successful. 
A) little difference in growth rates between the two groups of countries. 
B) higher growth rates in those countries using policies that emphasize export expansion. 
C) higher growth rates in those countries practicing ISI. 
D) no evidence that either type of policy has been successful.

Question 11

Cartel power is weakened by the tendency for:

Accepted Answer

A) the non-members to join a successful cartel. 
B) the cartel members to increase output above their production quotas. 
C) the cartel members to decrease output below their production quotas. 
D) demand for the cartel's product to increase over time. 
A) the non-members to join a successful cartel. 
B) the cartel members to increase output above their production quotas. 
C) the cartel members to decrease output below their production quotas. 
D) demand for the cartel's product to increase over time.

Question 12

The figure given below shows a situation where the producers of good X are forming an international cartel. Here, MR = Marginal Revenue, MC = Marginal Cost, and P = Price. The cartel use monopoly pricing for its output.   How much well-being would world lose as a result of the formation of the cartel?

Accepted Answer

A) $5.0 billion 
B) $12.5 billion 
C) $15.0 billion 
D) $50.0 billion 
A) $5.0 billion 
B) $12.5 billion 
C) $15.0 billion 
D) $50.0 billion

Question 13

The relative prices of wool, cocoa, aluminum, rice, cotton and sugar declined by more than half during the 20th century.

Accepted Answer

A) True 
 B)False

Question 14

There is substantial evidence to conclude that there is a very tight link between being a developing country and being an exporter of primary products.

Accepted Answer

A) True 
 B)False

Question 15

A reason why agricultural cartels are not as effective as OPEC is that non-member countries can:

Accepted Answer

A) increase their supply of crops but not their oil supply. 
B) decrease their supply of crops but not their oil supply. 
C) increase their oil supply but not their supply of crops. 
D) decrease their oil supply but not their supply of crops. 
A) increase their supply of crops but not their oil supply. 
B) decrease their supply of crops but not their oil supply. 
C) increase their oil supply but not their supply of crops. 
D) decrease their oil supply but not their supply of crops.

Question 16

Countries having comparative advantages based on land and in various natural resources are most likely to:

Accepted Answer

A) export manufactured goods. 
B) experience biased growth. 
C) experience rapid accumulation of capital. 
D) export products like gold, coffee, or cocoa. 
A) export manufactured goods. 
B) experience biased growth. 
C) experience rapid accumulation of capital. 
D) export products like gold, coffee, or cocoa.

Question 17

Which of the following, if happens, may result in an increase in the relative price of primary products in the world market?

Accepted Answer

A) The marginal cost of producing the primary goods declines over time 
B) Productivity growth in the primary sectors is slower than that in the manufacturing sectors 
C) The demand for primary products declines over time 
D) The stock of inventories of primary products unexpectedly increases 
A) The marginal cost of producing the primary goods declines over time 
B) Productivity growth in the primary sectors is slower than that in the manufacturing sectors 
C) The demand for primary products declines over time 
D) The stock of inventories of primary products unexpectedly increases

Question 18

The figure given below shows a situation where the producers of good X are forming an international cartel. Here, MR = Marginal Revenue, MC = Marginal Cost, and P = Price. The cartel use monopoly pricing for its output.   If the producers of good X form a cartel and use monopoly pricing, the price per unit would be _____ and the industry profits (before subtracting any fixed costs) would be _____.

Accepted Answer

A) $500; $10 billion 
B) $600; $90 billion 
C) $1,000; $60 billion 
D) $1,000; $40 billion 
A) $500; $10 billion 
B) $600; $90 billion 
C) $1,000; $60 billion 
D) $1,000; $40 billion

Question 19

For a cartel behaving like a pure monopoly, equating marginal revenue to marginal cost maximizes profit over and above the perfectly competitive profit.

Accepted Answer

A) True 
 B)False

Question 20

According to comparative advantage theory, the developing countries are expected to export:

Accepted Answer

A) high-tech manufactured goods. 
B) sophisticated capital equipment. 
C) primary products. 
D) specialized software services. 
A) high-tech manufactured goods. 
B) sophisticated capital equipment. 
C) primary products. 
D) specialized software services.

Exam 14: Trade Policies for Developing Countries

How successful has import-substituting industrialization been?

If exporters of a primary product form an international cartel, then:

The world prices of the primary products are less likely to decline if:

If a cartel is functioning at full effectiveness, then as a cartel's marginal cost of production increases, the cartel's profit maximizing price:

Which of the following factors is most likely to result in a decline in the relative price of the primary products in the world market?

Why has emphasizing new exports of less-skilled-labor-intensive manufactured goods to industrialized countries been difficult for developing countries?

Growth rates have been consistently lower for developing counties than for developed countries.

Evidence suggests that depth and speed of reforms did not matter for the success of transition in the formerly socialist countries.

Studies comparing growth rates of countries practicing ISI with growth rates of countries using policies that emphasize expansion of exports have found:

Cartel power is weakened by the tendency for:

The relative prices of wool, cocoa, aluminum, rice, cotton and sugar declined by more than half during the 20th century.

There is substantial evidence to conclude that there is a very tight link between being a developing country and being an exporter of primary products.

A reason why agricultural cartels are not as effective as OPEC is that non-member countries can:

Countries having comparative advantages based on land and in various natural resources are most likely to:

Which of the following, if happens, may result in an increase in the relative price of primary products in the world market?

For a cartel behaving like a pure monopoly, equating marginal revenue to marginal cost maximizes profit over and above the perfectly competitive profit.

According to comparative advantage theory, the developing countries are expected to export:

International Economics Is Different

The Basic Theory Using Demand and Supply

Why Everybody Trades: Comparative Advantage

Trade: Factor Availability and Factor Proportions Are Key

Who Gains and Who Loses From Trade

Scale Economies, Imperfect Competition, and Trade

Growth and Trade Part II: Trade Policy

Analysis of a Tariff

Nontariff Barriers to Imports

Arguments for and Against Protection

Pushing Exports

Trade Blocs and Trade Blocks

Trade and the Environment

Multinationals and Migration: International Factor Movements

Payments Among Nations

The Foreign Exchange Market

Forward Exchange and International Financial Investment

What Determines Exchange Rates

Government Policies Toward the Foreign Exchange Market

International Lending and Financial Crises

How Does the Open Macroeconomy Work

Internal and External Balance With Fixed Exchange Rates

Floating Exchange Rates and Internal Balance

National and Global Choices: Floating Rates and the Alternatives

Filters

The relative prices of wool, cocoa, aluminum, rice, cotton and sugar declined by more than half during the 20^th century.