MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 46 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
With International trade, what would be the maximum amount of steel that South Korea would be willing to export to Japan in exchange for each DVD ? |
| A. | One-half ton of steel |
| B. | One ton of steel |
| C. | Two tons of steel |
| D. | Two and one-half tons of steel |
| Answer» D. Two and one-half tons of steel | |
| 2. |
With international trade, what would be the maximum number of DVDs that Japan would be willing to export to South Korea in exchange for each ton of steel ? |
| A. | One DVD |
| B. | Two DVDs |
| C. | Three DVDs |
| D. | Four DVDs |
| Answer» B. Two DVDs | |
| 3. |
Which countries terms of trade improved between 1990 and 2000 ? |
| A. | Mexico and Denmark |
| B. | Sweden and Denmark |
| C. | Sweden and Spain |
| D. | Mexico and Sweden |
| Answer» E. | |
| 4. |
Under free trade, Canada would not realize any gains from trade with Sweden if Canada ? |
| A. | Trades at Canada’s marginal rate of transformation |
| B. | Trade at Sweden’s marginal rate of transformation |
| C. | Specializes completely in the production of its export good |
| D. | Specializes partially in the production of its exports goods |
| Answer» B. Trade at Sweden’s marginal rate of transformation | |
| 5. |
The terms of trade is given by the prices ? |
| A. | Paid for all goods exported by the home country |
| B. | Received for all goods exported by the home country |
| C. | Received for exports and paid for imports |
| D. | Of primary products as opposed to manufactured products |
| Answer» D. Of primary products as opposed to manufactured products | |
| 6. |
The relative price (MRT) of T in terms of S is ? |
| A. | 2 |
| B. | 1/2 |
| C. | 500 |
| D. | 1000 |
| Answer» B. 1/2 | |
| 7. |
The Relative price (MRT)of S in terms of T i ? |
| A. | 2 |
| B. | 1/2 |
| C. | 100 |
| D. | 1000 |
| Answer» C. 100 | |
| 8. |
The opportunity cost of one DVD in Japan is ? |
| A. | One ton of steel |
| B. | Two tons of steel |
| C. | Three tons of steel |
| D. | Four tons of steel |
| Answer» B. Two tons of steel | |
| 9. |
The opportunity cost of one DVD in South Korea is ? |
| A. | One-half ton of steel |
| B. | One ton of steel |
| C. | One and one-half tons of steel |
| D. | Two tons of steel |
| Answer» E. | |
| 10. |
The gains from international trade are closely related to ? |
| A. | The labor theory of value |
| B. | How much the autarky price differs from international terms of trade change |
| C. | The fact that a country must lose from trade |
| D. | All of the above |
| Answer» C. The fact that a country must lose from trade | |
| 11. |
The earliest statement of the principle of comparative advantage is associated with ? |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | Eli Heckscher |
| D. | Berti IOhlin |
| Answer» C. Eli Heckscher | |
| 12. |
The classical trade theories of Smith and Ricardo predict that ? |
| A. | Countries will completely specialize in the production of export goods |
| B. | Considerable trade will occur between countries with different levels of technology |
| C. | Small countries could obtain of the gains from trade when trading with large countries |
| D. | All of the above |
| Answer» E. | |
| 13. |
Mercantilism ? |
| A. | Is the philosophy of free international trade? |
| B. | Was a system of export promotion and barriers to imports practiced by governments? |
| C. | Was praised by Adam Smith in the Wealth of Nations |
| D. | Both (a) and (c) |
| Answer» C. Was praised by Adam Smith in the Wealth of Nations | |
| 14. |
John Stuart Mill was the founder of the ? |
| A. | Theory of reciprocal demand |
| B. | Theory of absolute advantage |
| C. | Theory of comarative advantage |
| D. | Theory of mercantilism |
| Answer» B. Theory of absolute advantage | |
| 15. |
International trade is based on the nation that ? |
| A. | Different currencies are an obstacle to international trade |
| B. | Goods are more mobile internationally than are resources |
| C. | Resources are more mobile internationally that are goods |
| D. | A country’s exports should always exceed its imports |
| Answer» C. Resources are more mobile internationally that are goods | |
| 16. |
In the classical model of Ricardo, the direction of trade is determined by ? |
| A. | Absolute advantage |
| B. | Comparative advantage |
| C. | Physical advantage |
| D. | Which way the wind blows |
| Answer» C. Physical advantage | |
| 17. |
In autarky, when a community maximizes its standard of living its production point is ? |
| A. | below the production possibility frontier |
| B. | on the production possibility frontier |
| C. | above the production possibility frontier |
| D. | can’t tell without more information |
| Answer» C. above the production possibility frontier | |
| 18. |
In autarky, the relative price of X, in terms of Y in A would be ? |
| A. | 1/2 Y |
| B. | 3/4 Y |
| C. | 1 Y |
| D. | 4/3 Y |
| Answer» E. | |
| 19. |
In autarky the relative price of wine, in terms of beer, in Country B is ? |
| A. | 1W = 3B |
| B. | 1W = 4 1/2B |
| C. | 1W = 5B |
| D. | 1W = 6B |
| Answer» C. 1W = 5B | |
| 20. |
In autarky equilibrium ? |
| A. | Production equals consumption |
| B. | Exports equal imports |
| C. | there is no trade |
| D. | All of the above |
| Answer» E. | |
| 21. |
In aukarky, when a community maximizes its standard of living, its production and consumption point is ? |
| A. | below the production possibility frontier |
| B. | On the production possibility frontier |
| C. | above the production possibility frontier |
| D. | can’t tell without more information |
| Answer» C. above the production possibility frontier | |
| 22. |
In autarky, the relative price of wine, in terms of beer, in country A is ? |
| A. | 1W = 1B |
| B. | 1W = 2B |
| C. | 1W = 3B |
| D. | 1W = 1/3B |
| Answer» D. 1W = 1/3B | |
| 23. |
If the relative Price (MRT) of T were to increase, then the price line would ? |
| A. | Shift out in a parallel fashion |
| B. | shift in a parallel fashion |
| C. | become steeper |
| D. | Become flatter |
| Answer» E. | |
| 24. |
If the relative price (MRT) of S were to increase, then the price line would ? |
| A. | shift out in a parallel fashion |
| B. | shift in a parallel fashion |
| C. | Become steeper |
| D. | Become flatter |
| Answer» D. Become flatter | |
| 25. |
If the international terms of trade settle at a level that is between each country’s opportunity cost ? |
| A. | There is no basis for gainful trade for either country |
| B. | Both countries gain from trade |
| C. | Only one country gains from trade |
| D. | One country gain and the other country loses from trade |
| Answer» C. Only one country gains from trade | |
| 26. |
If the countries were to trade along the lines of absolute advantage ? |
| A. | A would export X to B |
| B. | B would import Y from A |
| C. | Neither country would want to trade |
| D. | None of the above |
| Answer» C. Neither country would want to trade | |
| 27. |
If the autarky price of S were lower in country A than in country B then if trade were allowed ? |
| A. | A would likely export S to B |
| B. | A would likely import S from B |
| C. | neither country would want to trade |
| D. | None of the above |
| Answer» B. A would likely import S from B | |
| 28. |
If Hong Kong and Taiwan have identical production possibilities curves that are subject to increasing opportunity costs ? |
| A. | Trade would depend on difference in demand conditions |
| B. | Trade would depend on economies of large-scale production |
| C. | Trade would depend on the use of different currencies |
| D. | There would be no basis for gainful trade |
| Answer» B. Trade would depend on economies of large-scale production | |
| 29. |
If countries were to trade along the lines of comparative advantage ? |
| A. | A would export X to B |
| B. | A would export Y to B |
| C. | Neither country would want to trade |
| D. | None of the above |
| Answer» C. Neither country would want to trade | |
| 30. |
If a country has a liner (downward sloping) production possibilities frontier, then production is said to be subjected to ? |
| A. | constant opportunity costs |
| B. | decreasing opportunity costs |
| C. | first increasing and then decreasing opportunity costs |
| D. | increasing opportunity costs |
| Answer» B. decreasing opportunity costs | |
| 31. |
If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ? |
| A. | constant opportunity costs |
| B. | decreasing opportunity costs |
| C. | first increasing and then decreasing opportunity costs |
| D. | increasing opportunity costs |
| Answer» E. | |
| 32. |
Given free trade, small nations tend to benefit the most from trade since they ? |
| A. | Are more productive than their large trading partners |
| B. | Are less productive than their large trading partners |
| C. | Have demand preferences and income levels lower than their large trading partners |
| D. | Realize terms of trade lying near the MRTs of their large trading partners |
| Answer» E. | |
| 33. |
G. MecDougall showed in his tests that ? |
| A. | relatively higher U.S labor productivity was associated with relatively higher U.K export ratios |
| B. | relatively high U.K labor productivity was associated with relatively higher U.K export ratios |
| C. | Labor productivity ratios and export ratios were not associated with each other |
| D. | None of the above |
| Answer» C. Labor productivity ratios and export ratios were not associated with each other | |
| 34. |
G. MacDougall’s empirical results can be interpreted as ? |
| A. | evidence against the classical model |
| B. | evidence against the Heckscher-Ohlin model |
| C. | Support for the Ricardian modal |
| D. | Support for the Heckscher-Ohlin model |
| Answer» D. Support for the Heckscher-Ohlin model | |
| 35. |
G. MacDougal compared export ratios and labor productivity ratios for the United States and the United Kingdom in order to test the: |
| A. | Ricardian theory of comparative |
| B. | Heckscher Ohl in theory of comparative advantage |
| C. | Linder theory of overlapping demand all of the above |
| D. | None of these |
| Answer» B. Heckscher Ohl in theory of comparative advantage | |
| 36. |
Dynamic gains from trade could result from ? |
| A. | The stimulus of additional investment spending as market open |
| B. | Economies of large scale production as markets open |
| C. | Additional competition made possible by the opening of markets |
| D. | All of the above |
| Answer» E. | |
| 37. |
Country B has an absolute advantage in ? |
| A. | Product X |
| B. | Product Y |
| C. | Neither X nor Y |
| D. | Both X and Y |
| Answer» B. Product Y | |
| 38. |
Country B has the comparative advantage in ? |
| A. | Wine |
| B. | Beer |
| C. | Both wine and beer |
| D. | Neither wine nor beer |
| Answer» E. | |
| 39. |
Country A has an absolute advantage in__________? |
| A. | Product X |
| B. | Product Y |
| C. | Neither X nor Y |
| D. | Both X and Y |
| Answer» C. Neither X nor Y | |
| 40. |
Country A has an absolute advantage in ? |
| A. | Beer |
| B. | Wine |
| C. | Both products |
| D. | neither products |
| Answer» E. | |
| 41. |
Country A has the comparative advantage in ? |
| A. | Wine |
| B. | Beer |
| C. | Both wine and beer |
| D. | Neither wine nor beer |
| Answer» B. Beer | |
| 42. |
Comparative advantage is determined by ? |
| A. | actual differences in labor productivity between countries |
| B. | relative differences in labor productivity between countries |
| C. | Both (a) and (b) |
| D. | Neither (a) nor (b) |
| Answer» C. Both (a) and (b) | |
| 43. |
According to the principle of comparative advantage ? |
| A. | South Korea should export steel |
| B. | South Korea should export steel and DVDs |
| C. | Japan should export steel |
| D. | Japan should export steel and DVDs |
| Answer» B. South Korea should export steel and DVDs | |
| 44. |
According to the Principle of absolute advantage Japan should ? |
| A. | Export steel |
| B. | Export DVDs |
| C. | Exports steel and DVDs |
| D. | There is no basis for gainful specialization and trade |
| Answer» E. | |
| 45. |
According to the Classical theory of international trade ? |
| A. | Only countries with low wages will export |
| B. | Only countries with high wages will import |
| C. | Countries with high wages will have higher prices |
| D. | All of the above are false |
| Answer» E. | |
| 46. |
Absolute advantage is determined by ? |
| A. | actual differences in labor production between countries |
| B. | relative differences in labor productivity between countries |
| C. | Both (a) and (b) |
| D. | Neither (a) nor (b) |
| Answer» B. relative differences in labor productivity between countries | |