Download Document

1. A country with a lower opportunity cost of producing a good than any other
country:
a) Has an absolute advantage in that good
b) Has a comparative advantage in producing that good
c) Has no incentive to trade in that good
d) Has comparative advantage in other goods
2. The ‘terms of trade’ refer to:
a) The quantity of imports that can be financed with a given quantity of exports
b) The quantity of exports that can be financed with a given quantity of imports
c) The degree to which one country has an absolute advantage
d) The assignment of transportation costs
3. Improvements in income, production, or satisfaction owing to the exchange of
goods or services are called:
a) Gains from trade
b) Terms of trade
c) The growth rate
d) Productivity improvements
4. What should happen to the equilibrium price and quantity in a market as a result of
a tariff on imports?
a) Both increase
b) Price increases but the quantity traded falls
c) Price decreases but quantity traded increases
d) Both fall
5. The removal of import restrictions that protect domestic firms and workers within a
country generally result in:
a) Both winners and losers within the country although overall, winners gain
more than losers
b) Winners but no losers within the country
c) Both winners and losers within the country although, overall losers hurt
more than winners
d) Losers but no winners within the country
6. Sources of productivity growth include:
a) Higher skills
b) More capital
c) Improved management
d) All of the above
7. The neoclassical growth model explains differences in economic growth rates
across countries through:
a) Differences in prices
b) Differences in asset endowments
c) Differences in technological change
d) Differences in wealth
8. Which of the following is not a stage/compnent of technological change:
a) Invention
b) Innovation
c) Diffusion
d) Flexibility
9. Endogenous growth models attempt to:
a) Incorporate various influences on growth within the model
b) Account for the importance of human capital
c) Account for the importance of research and development
d) All of the above
10. Declining investments in infrastructure will:
a) Lead to greater delays and opportunity costs
b) Promote an environment conducive to private saving and investment
c) Help keep costs down
d) All of the above