Question 1

International commodity agreements do not:

Accepted Answer

A)  Consist of consuming and producing nations who desire market stability 
B)  Levy export cutbacks so as to offset rising commodity prices 
C)  Utilize buffer stocks to generate commodity price stability 
D)  Increase the supply of commodities to prevent rising prices

Question 2

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions 
-Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Accepted Answer

A)  Selling 15 pounds of tin 
B)  Selling 30 pounds of tin 
C)  Buying 15 pounds of tin 
D)  Buying 30 pounds of tin

Question 3

In its transition toward capitalism,by the 1990s China permitted free enterprise as well as democracy for its people.

Accepted Answer

A) True 
 B)False

Question 4

For the oil-importing countries,the increases in oil prices in 1973-1974 and 1979-1980 resulted in all of the following except:

Accepted Answer

A)  Balance of trade deficits 
B)  Price inflation 
C)  Constrained economic growth 
D)  Improving terms of trade

Question 5

A reason why it is difficult for producers to maintain a cartel is that:

Accepted Answer

A)  The elasticity of demand for the cartel's output decreases over time 
B)  Producers in the cartel have the economic incentive to cheat 
C)  Economic profits discourage other producers from entering the industry 
D)  Producers in the cartel have the motivation to lower price but not to raise price

Question 6

Are economic downturns helpful to cartels?

Accepted Answer

The answer of Are economic downturns helpful to cartels?...

Question 7

Figure 7.5 Global Market for Tin 
-Figure 7.5 represents the global market for tin.The initial equilibrium price and quantity is at point A.As a result of an International Tin Agreement a price range of $3.27 - $4.02 is set.As the supply of tin increases from S0 to S1,the buffer-stock manager will need to

Accepted Answer

A)  buy 10,000 pounds of tin 
B)  buy 20,000 pounds of tin 
C)  sell 10,000 pounds of tin 
D)  sell 20,000 pounds of tin

Question 8

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions 
-Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a system of export quotas,the tin producers could maintain the target price by:

Accepted Answer

A)  Increasing the quantity of tin supplied by 15 pounds 
B)  Increasing the quantity of tin supplied by 30 pounds 
C)  Decreasing the quantity of tin supplied by 15 pounds 
D)  Decreasing the quantity of tin supplied by 30 pounds

Question 9

A cartel tends to be most successful in maximizing the profits of its members when there are a large number of producers in the cartel and these producers' cost and demand conditions greatly differ from each other.

Accepted Answer

A) True 
 B)False

Question 10

Figure 7.3.World Oil Market 
-Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

Accepted Answer

A)  Profits totaling $280 
B)  Profits totaling $360 
C)  Losses totaling $140 
D)  Losses totaling $180

Question 11

The development of countries like South Korea and Singapore has been underlaid by all of the following except:

Accepted Answer

A)  High domestic interest rates 
B)  R&D and product innovation 
C)  Education and on-the-job training 
D)  High levels of saving and investment

Question 12

To be considered a good candidate for an export cartel,a commodity should:

Accepted Answer

A)  Be a manufactured good 
B)  Be a primary product 
C)  Have a high price elasticity of supply 
D)  Have a low price elasticity of demand

Question 13

Prolonged defense of a price ceiling tends to increase the supply of a commodity held by a buffer stock manager,thus putting downward pressure on price.

Accepted Answer

A) True 
 B)False

Question 14

One factor that has prevented the formation of cartels for producers of commodities is that:

Accepted Answer

A)  The demand for commodities tends to be price inelastic 
B)  Substitute products exist for many commodities 
C)  Commodity produces have been able to dominate world markets 
D)  Production of most commodities is capital intensive

Question 15

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions 
-Consider Figure 7.1.Suppose the demand for tin increases from D0 to D1. Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Accepted Answer

A)  Selling 15 pounds of tin 
B)  Selling 30 pounds of tin 
C)  Buying 15 pounds of tin 
D)  Buying 30 pounds of tin

Question 16

Developing countries have often felt that it is easier to protect their manufacturers,via import-substitution policies,against foreign competitors than to force industrial nations to reduce trade restrictions on products exported by developing countries.

Accepted Answer

A) True 
 B)False

Question 17

A key factor underlying the instability of primary product prices and export receipts of developing nations is the

Accepted Answer

A)  Low price elasticity of the demand of primary products 
B)  High price elasticity of supply of primary products 
C)  High price elasticity of demand of primary products 
D)  None of the above

Question 18

If the bauxite exporting countries form a cartel to boost the price of bauxite so as to increase sales revenue,they believe that the demand for bauxite:

Accepted Answer

A)  Is inelastic with respect to price changes 
B)  Is elastic with respect to price changes 
C)  Will increase in response to a price increase 
D)  Will not change in response to a price change

Question 19

The OPEC nations during the 1970s manifested their market power by utilizing:

Accepted Answer

A)  Export tariffs levied for revenue purposes 
B)  Export tariffs levied for protective purposes 
C)  Import tariffs levied for protective purposes 
D)  Import tariffs levied for revenue purposes

Question 20

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

Accepted Answer

A)  Export promotion 
B)  Import substitution 
C)  International commodity agreements 
D)  Multilateral contract

Exam 7: Trade Policies for the Developing Nations

International commodity agreements do not:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D₀ to D₂.Under a buffer stock system,the buffer-stock manager could maintain the target price by:

In its transition toward capitalism,by the 1990s China permitted free enterprise as well as democracy for its people.

For the oil-importing countries,the increases in oil prices in 1973-1974 and 1979-1980 resulted in all of the following except:

A reason why it is difficult for producers to maintain a cartel is that:

Are economic downturns helpful to cartels?

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D₀ to D₂.Under a system of export quotas,the tin producers could maintain the target price by:

A cartel tends to be most successful in maximizing the profits of its members when there are a large number of producers in the cartel and these producers' cost and demand conditions greatly differ from each other.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

The development of countries like South Korea and Singapore has been underlaid by all of the following except:

To be considered a good candidate for an export cartel,a commodity should:

Prolonged defense of a price ceiling tends to increase the supply of a commodity held by a buffer stock manager,thus putting downward pressure on price.

One factor that has prevented the formation of cartels for producers of commodities is that:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin increases from D₀ to D_1. Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Developing countries have often felt that it is easier to protect their manufacturers,via import-substitution policies,against foreign competitors than to force industrial nations to reduce trade restrictions on products exported by developing countries.

A key factor underlying the instability of primary product prices and export receipts of developing nations is the

If the bauxite exporting countries form a cartel to boost the price of bauxite so as to increase sales revenue,they believe that the demand for bauxite:

The OPEC nations during the 1970s manifested their market power by utilizing:

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

Exam 7: Trade Policies for the Developing Nations

International commodity agreements do not:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a buffer stock system,the buffer-stock manager could maintain the target price by:

In its transition toward capitalism,by the 1990s China permitted free enterprise as well as democracy for its people.

For the oil-importing countries,the increases in oil prices in 1973-1974 and 1979-1980 resulted in all of the following except:

A reason why it is difficult for producers to maintain a cartel is that:

Are economic downturns helpful to cartels?

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a system of export quotas,the tin producers could maintain the target price by:

A cartel tends to be most successful in maximizing the profits of its members when there are a large number of producers in the cartel and these producers' cost and demand conditions greatly differ from each other.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

The development of countries like South Korea and Singapore has been underlaid by all of the following except:

To be considered a good candidate for an export cartel,a commodity should:

Prolonged defense of a price ceiling tends to increase the supply of a commodity held by a buffer stock manager,thus putting downward pressure on price.

One factor that has prevented the formation of cartels for producers of commodities is that:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin increases from D0 to D1. Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Developing countries have often felt that it is easier to protect their manufacturers,via import-substitution policies,against foreign competitors than to force industrial nations to reduce trade restrictions on products exported by developing countries.

A key factor underlying the instability of primary product prices and export receipts of developing nations is the

If the bauxite exporting countries form a cartel to boost the price of bauxite so as to increase sales revenue,they believe that the demand for bauxite:

The OPEC nations during the 1970s manifested their market power by utilizing:

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D₀ to D₂.Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin decreases from D₀ to D₂.Under a system of export quotas,the tin producers could maintain the target price by:

Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions -Consider Figure 7.1.Suppose the demand for tin increases from D₀ to D_1. Under a buffer stock system,the buffer-stock manager could maintain the target price by: