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1. If the quantity supplied of exports of commodity X by a nation exceeds the quantity demanded of exports of commodity X by another nation, the relative commodity price of commodity X will


1. fall


2. rise


3. remain unchanged


4. any of the above


2. Community indifference curves introduce


1. the production conditions in the nation


2. the tastes or demand preferences of the nation


3. both the production conditions and the tastes of the nation


4. neither the production conditions nor the tastes of the nation




3. As we move down a community indifference curve in Fig. 3-2, MRS_CW


1. declines


2. rises


3. remains unchanged


4. may decline rise or remain unchanged




4. The internal equilibrium relative commodity price in a nation in the absence of trade is determined by the nation's


1. production possibilities curve


2. indifference map


3. production possibilities curve or indifference map


4. production possibilities curve and indifference map




5. At point A in Fig. 3-3(i.e., at the pretrade equilibrium point in production and consumption in the U.K.)


1. \(MR{T_{CW}} = {P_A} = MR{S_{CW}}\)


2. \(MR{T_{CW}} = {P_A} \ne MR{S_{CW}}\)


3. \(MR{T_{CW}} \ne {P_A} = MR{S_{CW}}\)


4. \(MR{T_{CW}} \ne {P_A} \ne MR{S_{CW}}\)




6. When the U.K. is in equilibrium with trade in Fig. 3-3


1. \(MR{T_{CW}} = {P_B} = MR{S_{CW}}\)


2. \(MR{T_{CW}} = {P_B} \ne MR{S_{CW}}\)


3. \(MR{T_{CW}} \ne {P_B} = MR{S_{CW}}\)


4. \(MR{T_{CW}} \ne {P_B} \ne MR{S_{CW}}\)




7. Trade triangle BFE in panel A of Fig. 3-4 corresponds in panel B to trade triagle


1. OFF


2. OHJ


3. either OHJ or OFE


4. neither OHJ nor OFE




8. Trade triangle G'H'J' in panel A of Fig. 3-5 corresponds in panel B to trade triangle


1. OF'E'


2. OH'J'


3. either OF'E' or H'J'


4. neither OF'E nor OH'J'




9. The offer curve of a nation bulges or bends toward the axis that measures its


1. export commodity


2. import commodity


3. export or import commodity


4. nontraded commodity




10. At point E in Fig. 3-6


1. the U.K. is willing to exchange 60C for 60W


2. the U.S. is willing to exchange 60W for 60C


3. the U.S. is willing to export 60W and the U.K. is willing to import 60W


4. the U.K. is willing to export 60C and the U.S. is willing to import 60C


5. all of the above


11. At P_Gin Fig. 3-6


1. the wheat exports of the U.S. fall short of the wheat imports demanded by the U.K.


2. the wheat exports of the U.S. exceed the wheat imports demanded by the U.K.


3. the cloth exports of the U.S. exceed the cloth imports demanded by the U.K.




12. If a nation's terms of trade is 2, its trade partner's terms of trade is


1. 4


2. 2


3. 1


4. 1/2