Question 1

Explain the mercantilist view on trade.

Accepted Answer

The mercantilists believed tra

Question 2

With one hour of labor time nation A can produce either 3X or 3Y,while nation B can produce either 1X or 3Y (and labor is the only input).If 3X is exchanged for 3Y:

Accepted Answer

A)  nation A gains 2X 
B)  nation B gains 6Y 
C)  nation A gains 3Y 
D)  nation B gains 3Y 
A)  nation A gains 2X 
B)  nation B gains 6Y 
C)  nation A gains 3Y 
D)  nation B gains 3Y

Question 3

According to Adam Smith,international trade is based on:

Accepted Answer

A)  absolute advantage 
B)  comparative advantage 
C)  both absolute and comparative advantage 
D)  neither absolute nor comparative advantage 
A)  absolute advantage 
B)  comparative advantage 
C)  both absolute and comparative advantage 
D)  neither absolute nor comparative advantage

Question 4

The theory of comparative advantage was first proposed by

Accepted Answer

A)  Adam Smith 
B)  David Ricardo 
C)  J.M. Keynes 
D)  Paul Krugman 
A)  Adam Smith 
B)  David Ricardo 
C)  J.M. Keynes 
D)  Paul Krugman

Question 5

If domestically 3X=3Y in nation A,while 1X=1Y domestically in nation B:

Accepted Answer

A)  there will be no trade between the two nations 
B)  the relative price of X is the same in both nations 
C)  the relative price of Y is the same in both nations 
D)  all of the above 
A)  there will be no trade between the two nations 
B)  the relative price of X is the same in both nations 
C)  the relative price of Y is the same in both nations 
D)  all of the above

Question 6

Explain the benefits and risks of being a small country relative to the size of international markets.

Accepted Answer

A small country is one that is a price t

Question 7

Explain why Ricardo's model of trade was superior to Adam Smith's.

Accepted Answer

Smith's model was based on absolute adva

Question 8

If nation A can produce 5 units of good X or 10 units of good Y and nation B can produce 4 units of good X or 12 units of good Y we can conclude that nation A has a

Accepted Answer

A)  Comparative advantage in X and an absolute advantage in Y 
B)  Comparative advantage in X and an absolute advantage in X 
C)  Comparative advantage in Y and an absolute advantage in X 
D)  Comparative advantage in Y and an absolute advantage in Y 
A)  Comparative advantage in X and an absolute advantage in Y 
B)  Comparative advantage in X and an absolute advantage in X 
C)  Comparative advantage in Y and an absolute advantage in X 
D)  Comparative advantage in Y and an absolute advantage in Y

Question 9

Ricardo explained the law of comparative advantage on the basis of:

Accepted Answer

A)  the labor theory of value 
B)  the opportunity cost theory 
C)  the law of diminishing returns 
D)  all of the above 
A)  the labor theory of value 
B)  the opportunity cost theory 
C)  the law of diminishing returns 
D)  all of the above

Explain the mercantilist view on trade.

With one hour of labor time nation A can produce either 3X or 3Y,while nation B can produce either 1X or 3Y (and labor is the only input).If 3X is exchanged for 3Y:

According to Adam Smith,international trade is based on:

The theory of comparative advantage was first proposed by

If domestically 3X=3Y in nation A,while 1X=1Y domestically in nation B:

Explain the benefits and risks of being a small country relative to the size of international markets.

Explain why Ricardo's model of trade was superior to Adam Smith's.

If nation A can produce 5 units of good X or 10 units of good Y and nation B can produce 4 units of good X or 12 units of good Y we can conclude that nation A has a

Ricardo explained the law of comparative advantage on the basis of:

Introduction

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future Answers to Selected Problems on Web

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Exam 2: The Law of Comparative Advantage

Explain the mercantilist view on trade.

With one hour of labor time nation A can produce either 3X or 3Y,while nation B can produce either 1X or 3Y (and labor is the only input).If 3X is exchanged for 3Y:

According to Adam Smith,international trade is based on:

The theory of comparative advantage was first proposed by

If domestically 3X=3Y in nation A,while 1X=1Y domestically in nation B:

Explain the benefits and risks of being a small country relative to the size of international markets.

Explain why Ricardo's model of trade was superior to Adam Smith's.

If nation A can produce 5 units of good X or 10 units of good Y and nation B can produce 4 units of good X or 12 units of good Y we can conclude that nation A has a

Ricardo explained the law of comparative advantage on the basis of:

Introduction

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future Answers to Selected Problems on Web

Filters