International Economics MCQ Test - 2: The Pure Theory of International Trade - Supply
Click on the correct option. Text colour will change into green if your chosen option is corret and if it is wrong, it will change into red:
- The opportunity cost theory assumes that
- labor is the only factor of production
- the price or cost of a commodity can be inferred from its labor content
- labor is homogeneous
- none of the above
- with respect to a production possibilities curve, we can say that
- a point inside or below it implies that the economy is either not fully utilizing all of its resources or not using the best technology available to it
- a point on it involves the full employment of the economy's resources and the use of the best technology available
- a point above it cannot be reached with the resources and technology presently available to the nation
- all of the above
- A straight-line production possibilities curve refers to
- constant costs
- increasing costs
- decreasing costs
- any of the above
- With cloth measured along the horizontal axis and wheat along the vertical axis, the absolute slope of a straight-line production possibilities curve gives
- \({\rm{the MR}}{{\rm{T}}_{CW}}\)
- \({\rm{the }}{{\rm{p}}_c}/{p_w}\)
- \({\rm{both the MR}}{{\rm{T}}_{CW}}{\rm{ and the }}{{\rm{P}}_C}/{P_W}\)
- \({\rm{ neither the MR}}{{\rm{T}}_{CW}}{\rm{ nor the }}{{\rm{P}}_C}/{P_W}\)
- If in the absence of trade the internal equilibrium \({P_C}/{P_W}\) is lower in the U.K. than in the U.S., then
- the U.K. has a comparative advantage in cloth with respect to the U.S.,
- the U.K. has a comparative disadvantage in wheat
- the U.S. has a comparative advantage in wheat
- the U.S. has a comparative disadvantage in cloth
- all of the above
- The production frontier for the U.K. in Fig. 2-2 is given by the straight line through points
- A and B in the absence of trade, E and B with trade
- A and B with trade, and E and B without trade
- E and B with and without trade
- A and B with and without trade
- If a nation gains from trade, its consumption point is
- on its production possibilities frontier
- inside its production possibilities frontier
- above its production possibilities frontier
- any of the above
- Increasing opportunity costs to produce more and more units of a commodity are given by a production possibilities curve that is
- concave to the origin
- convex to the origin
- a straight line
- any of the above
- With cloth measured along the horizontal axis and wheat along the vertical axis, the absolute slope of a concave production possibilities curve gives
- \({\rm{the MR}}{{\rm{T}}_{CW}}\)
- the internal equilibrium \({P_C}/{P_W}\) in isolation
- both the \({\rm{MR}}{{\rm{T}}_{CW}}\) and the internal equilibrium \({P_C}/{P_W}\)
- neither the \({\rm{MR}}{{\rm{T}}_{CW}}\) nor the internal equilibrium \({P_C}/{P_W}\)
- With cloth measured along the horizontal axis and wheat along the vertical axis, a movement down the production possibilities curve results in
- a decrease in \({\rm{MR}}{{\rm{T}}_{CW}}\)
- an increase in \({\rm{MR}}{{\rm{T}}_{CW}}\)
- an increase in \({\rm{MR}}{{\rm{T}}_{CW}}\)
- any of the above
- With trade, specialization in production is likely to be
- complete with increasing costs and incomplete with constant costs
- complete with constant costs and incomplete with increasing costs
- complete with constant and increasing costs
- incomplete with both constant and increasing costs
- A difference in relative commodity prices between two nations can be based upon a difference in
- factor endowments
- technology
- tastes
- all of the above
No comments:
Post a Comment