Question 1

The huge differences in standards of living across the many different countries of the world are largely the result of:

Accepted Answer

A)  different rates of economic growth during the last two centuries. 
B)  different economic growth performances dating back for thousands of years. 
C)  different rates of population growth. 
D)  sharp declines in per capita real output in what are now poor countries. 
A)  different rates of economic growth during the last two centuries. 
B)  different economic growth performances dating back for thousands of years. 
C)  different rates of population growth. 
D)  sharp declines in per capita real output in what are now poor countries.

Question 2

A shortcoming of general equilibrium analysis of international trade is that:

Accepted Answer

A)  indifference curves can only be ranked ordinally; they do not reflect actual levels of welfare. 
B)  it reflects only the production side of the economy. 
C)  it only shows who gains and who loses when an economy shifts to free trade, not what the total gains in welfare are. 
D)  All of the above. 
E)  None of the above. 
A)  indifference curves can only be ranked ordinally; they do not reflect actual levels of welfare. 
B)  it reflects only the production side of the economy. 
C)  it only shows who gains and who loses when an economy shifts to free trade, not what the total gains in welfare are. 
D)  All of the above. 
E)  None of the above.

Question 3

Which region of the world today has the lowest per capita income?

Accepted Answer

A)  Eastern Europe. 
B)  Asia. 
C)  Africa. 
D)  Latin America. 
A)  Eastern Europe. 
B)  Asia. 
C)  Africa. 
D)  Latin America.

Question 4

The two-country partial equilibrium model of international trade shows that:

Accepted Answer

A)  international trade simultaneously affects consumer and producer welfare in both the importing and exporting economies. 
B)  in markets where a country is an exporter, consumers gain and competing domestic producers lose welfare. 
C)  in markets where a country is an importer, consumers lose welfare when the competition from foreign consumers forces them to pay more for the goods. 
D)  All of the above. 
E)  None of the above. 
A)  international trade simultaneously affects consumer and producer welfare in both the importing and exporting economies. 
B)  in markets where a country is an exporter, consumers gain and competing domestic producers lose welfare. 
C)  in markets where a country is an importer, consumers lose welfare when the competition from foreign consumers forces them to pay more for the goods. 
D)  All of the above. 
E)  None of the above.

Question 5

World economic growth over the past 200 years has been characterized by:

Accepted Answer

A)  convergence of per capita output across nations.. 
B)  stagnation. 
C)  a slowdown from earlier centuries. 
D)  divergence of per capita output across nations. 
A)  convergence of per capita output across nations.. 
B)  stagnation. 
C)  a slowdown from earlier centuries. 
D)  divergence of per capita output across nations.

Question 6

Consumer surplus is:

Accepted Answer

A)  the area between the demand curve and the market price. 
B)  the difference between welfare gained from consuming the equilibrium level of output and the total revenue paid to producers. 
C)  the net welfare gain to consumers from being able to buy and consume a product. 
D)  All of the above. 
E)  None of the above. 
A)  the area between the demand curve and the market price. 
B)  the difference between welfare gained from consuming the equilibrium level of output and the total revenue paid to producers. 
C)  the net welfare gain to consumers from being able to buy and consume a product. 
D)  All of the above. 
E)  None of the above.

Question 7

The two-country partial equilibrium model of international trade shows that:

Accepted Answer

A)  in markets where a country is an importer, consumers lose welfare when free trade is established. 
B)  in markets where a country is an exporter, consumers gain and competing domestic producers lose welfare when free trade is established. 
C)  there are net gains from trade in each individual market when free trade is established. 
D)  all of the above. 
A)  in markets where a country is an importer, consumers lose welfare when free trade is established. 
B)  in markets where a country is an exporter, consumers gain and competing domestic producers lose welfare when free trade is established. 
C)  there are net gains from trade in each individual market when free trade is established. 
D)  all of the above.

Question 8

According to the partial equilibrium model of international trade, in a market for a good in which a country does enjoys a comparative advantage, free trade will lead to:

Accepted Answer

A)  welfare gains for the country's producers of the good that are greater in absolute value than the losses for domestic consumers of the good. 
B)  welfare gains for the country's producers of the good that are smaller in absolute value than the losses to domestic consumers of the good. 
C)  welfare losses for the country's producers of the good that are larger in absolute value than the gains to domestic consumers of the good. 
D)  welfare gains for the country's producers of the good that may be larger than or smaller in absolute value than the gains to domestic consumers of the good. 
E)  welfare gains for producers of the good that are exactly equal to the losses to domestic consumers of the good. 
A)  welfare gains for the country's producers of the good that are greater in absolute value than the losses for domestic consumers of the good. 
B)  welfare gains for the country's producers of the good that are smaller in absolute value than the losses to domestic consumers of the good. 
C)  welfare losses for the country's producers of the good that are larger in absolute value than the gains to domestic consumers of the good. 
D)  welfare gains for the country's producers of the good that may be larger than or smaller in absolute value than the gains to domestic consumers of the good. 
E)  welfare gains for producers of the good that are exactly equal to the losses to domestic consumers of the good.

Question 9

Historical data on international trade shows that in 1820:

Accepted Answer

A)  about 10 percent of the world's production was exported to other countries. 
B)  about half of the world's production was exported to other countries. 
C)  about 1 percent of the world's production was exported to other countries. 
D)  just one-tenth of 1 percent of the world's production was exported to other countries. 
A)  about 10 percent of the world's production was exported to other countries. 
B)  about half of the world's production was exported to other countries. 
C)  about 1 percent of the world's production was exported to other countries. 
D)  just one-tenth of 1 percent of the world's production was exported to other countries.

Question 10

Which of the following statements is true?

Accepted Answer

A)  In 1820, only about 10 percent of world output was exported to foreign markets. 
B)  Economies were more closed at the beginning of the twentieth century than they were halfway through the century, in 1950. 
C)  Over the past 200 years, international trade throughout the world has grown more rapidly than world output. 
D)  In the late 1990s, the United States exported less than it did 500 years earlier. 
A)  In 1820, only about 10 percent of world output was exported to foreign markets. 
B)  Economies were more closed at the beginning of the twentieth century than they were halfway through the century, in 1950. 
C)  Over the past 200 years, international trade throughout the world has grown more rapidly than world output. 
D)  In the late 1990s, the United States exported less than it did 500 years earlier.

Question 11

According to the two-country general equilibrium (PPF/indifference curves) model, if both countries production possibilities frontiers are identical, then:

Accepted Answer

A)  both countries must have the identical resource endowments and technology. 
B)  the two countries could still have different comparative advantages if their tastes differ. 
C)  the two countries could find that international trade is not welfare-increasing. 
D)  All of the above. 
E)  None of the above. 
A)  both countries must have the identical resource endowments and technology. 
B)  the two countries could still have different comparative advantages if their tastes differ. 
C)  the two countries could find that international trade is not welfare-increasing. 
D)  All of the above. 
E)  None of the above.

Question 12

The Rule of 72 says that:

Accepted Answer

A)  a quantity that grows at 10% will double in size in about 72 years. 
B)  a quantity that grows at 7.2% will double in 100 years. 
C)  a quantity that grows at at 7.2% will double in about 10 years. 
D)  none of the above. 
A)  a quantity that grows at 10% will double in size in about 72 years. 
B)  a quantity that grows at 7.2% will double in 100 years. 
C)  a quantity that grows at at 7.2% will double in about 10 years. 
D)  none of the above.

Question 13

The relative equality of per capita incomes throughout the world before the 19th century was due to the fact that:

Accepted Answer

A)  virtually all economies grew at similarly high rates. 
B)  population growth was much more similar in all countries. 
C)  no country had ever grown very fast. 
D)  None of the above; per capita incomes across countries were much less equal before the 19th century than they are today. 
A)  virtually all economies grew at similarly high rates. 
B)  population growth was much more similar in all countries. 
C)  no country had ever grown very fast. 
D)  None of the above; per capita incomes across countries were much less equal before the 19th century than they are today.

Question 14

According to the partial equilibrium model of international trade, in a market for a good in which a country does not have a comparative advantage, free trade will lead to:

Accepted Answer

A)  welfare gains for the country's producers of the good that are greater in absolute value than the losses for domestic consumers of the good. 
B)  welfare losses for the country's producers of the good that are smaller in absolute value than the gains to domestic consumers of the good. 
C)  welfare losses for the country's producers of the good that are greater in absolute value the gains to domestic consumers of the good. 
D)  welfare gains for the country's producers of the good that may be larger than or smaller than the gains to domestic consumers of the good. 
E)  welfare gains for producers of the good that are exactly equal to the losses to domestic consumers of the good. 
A)  welfare gains for the country's producers of the good that are greater in absolute value than the losses for domestic consumers of the good. 
B)  welfare losses for the country's producers of the good that are smaller in absolute value than the gains to domestic consumers of the good. 
C)  welfare losses for the country's producers of the good that are greater in absolute value the gains to domestic consumers of the good. 
D)  welfare gains for the country's producers of the good that may be larger than or smaller than the gains to domestic consumers of the good. 
E)  welfare gains for producers of the good that are exactly equal to the losses to domestic consumers of the good.

Question 15

Referring to partial equilibrium analysis, deadweight losses are also referred to as:

Accepted Answer

A)  trade triangles. 
B)  quota rent. 
C)  Okun's gap. 
D)  Harberger triangles. 
A)  trade triangles. 
B)  quota rent. 
C)  Okun's gap. 
D)  Harberger triangles.

Question 16

Referring to the production possibilities frontier (PPF) with international trade, trade triangles:

Accepted Answer

A)  grow larger with more total trade. 
B)  grow larger with less total trade. 
C)  grow larger with more exports only. 
D)  grow larger with more imports only. 
A)  grow larger with more total trade. 
B)  grow larger with less total trade. 
C)  grow larger with more exports only. 
D)  grow larger with more imports only.

Question 17

The general equilibrium model of international trade pointed out that:

Accepted Answer

A)  Whenever the relative prices of goods are not the same, countries can potentially enhance national welfare by engaging in international trade. 
B)  Producers will specialize and produce more of the goods that, compared to world prices, were relatively cheap at home and fewer of the goods that were relatively expensive. 
C)  A country will tend to export the goods that are relatively cheap at home, compared to overseas prices, and import the goods that are relatively expensive at home. 
D)  All of the above. 
E)  None of the above. 
A)  Whenever the relative prices of goods are not the same, countries can potentially enhance national welfare by engaging in international trade. 
B)  Producers will specialize and produce more of the goods that, compared to world prices, were relatively cheap at home and fewer of the goods that were relatively expensive. 
C)  A country will tend to export the goods that are relatively cheap at home, compared to overseas prices, and import the goods that are relatively expensive at home. 
D)  All of the above. 
E)  None of the above.

Question 18

What percentage of world output was being exported to other countries at the very end of the 20th century?

Accepted Answer

A)  less than 5 percent. 
B)  8 percent. 
C)  nearly 20 percent. 
D)  over 50 percent. 
A)  less than 5 percent. 
B)  8 percent. 
C)  nearly 20 percent. 
D)  over 50 percent.

Question 19

At the start of the twenty-first century, countries:

Accepted Answer

A)  exported about one-fifth of everything they produced. 
B)  imported about 1 percent of everything they consumed and invested. 
C)  imported about 9 percent of everything they consumed and invested. 
D)  exported about 7 percent of everything they consumed and invested. 
A)  exported about one-fifth of everything they produced. 
B)  imported about 1 percent of everything they consumed and invested. 
C)  imported about 9 percent of everything they consumed and invested. 
D)  exported about 7 percent of everything they consumed and invested.

The huge differences in standards of living across the many different countries of the world are largely the result of:

A shortcoming of general equilibrium analysis of international trade is that:

Which region of the world today has the lowest per capita income?

The two-country partial equilibrium model of international trade shows that:

World economic growth over the past 200 years has been characterized by:

Consumer surplus is:

The two-country partial equilibrium model of international trade shows that:

According to the partial equilibrium model of international trade, in a market for a good in which a country does enjoys a comparative advantage, free trade will lead to:

Historical data on international trade shows that in 1820:

Which of the following statements is true?

According to the two-country general equilibrium (PPF/indifference curves) model, if both countries production possibilities frontiers are identical, then:

The Rule of 72 says that:

The relative equality of per capita incomes throughout the world before the 19^th century was due to the fact that:

According to the partial equilibrium model of international trade, in a market for a good in which a country does not have a comparative advantage, free trade will lead to:

Referring to partial equilibrium analysis, deadweight losses are also referred to as:

Referring to the production possibilities frontier (PPF) with international trade, trade triangles:

The general equilibrium model of international trade pointed out that:

What percentage of world output was being exported to other countries at the very end of the 20^th century?

At the start of the twenty-first century, countries:

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Overcoming Diminishing Returns: Technology As an Externality

Technological Progress As Creative Destruction

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

Filters

Exam 1: The Welfare Gains From Trade

The huge differences in standards of living across the many different countries of the world are largely the result of:

A shortcoming of general equilibrium analysis of international trade is that:

Which region of the world today has the lowest per capita income?

The two-country partial equilibrium model of international trade shows that:

World economic growth over the past 200 years has been characterized by:

Consumer surplus is:

The two-country partial equilibrium model of international trade shows that:

According to the partial equilibrium model of international trade, in a market for a good in which a country does enjoys a comparative advantage, free trade will lead to:

Historical data on international trade shows that in 1820:

Which of the following statements is true?

According to the two-country general equilibrium (PPF/indifference curves) model, if both countries production possibilities frontiers are identical, then:

The Rule of 72 says that:

The relative equality of per capita incomes throughout the world before the 19th century was due to the fact that:

According to the partial equilibrium model of international trade, in a market for a good in which a country does not have a comparative advantage, free trade will lead to:

Referring to partial equilibrium analysis, deadweight losses are also referred to as:

Referring to the production possibilities frontier (PPF) with international trade, trade triangles:

The general equilibrium model of international trade pointed out that:

What percentage of world output was being exported to other countries at the very end of the 20th century?

At the start of the twenty-first century, countries:

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Overcoming Diminishing Returns: Technology As an Externality

Technological Progress As Creative Destruction

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

Filters

The relative equality of per capita incomes throughout the world before the 19^th century was due to the fact that:

What percentage of world output was being exported to other countries at the very end of the 20^th century?