国际贸易51544.docx

国际贸易51544.docx

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国际贸易51544

Assignment1

Duedate:

May7,2014

SectionIMultiplechoicequestions（20marks）

1..

Whichofthefollowingistrueofconsumersurplus?

A. 

Itisgraphicallyrepresentedastheareaundertheequilibriumpriceandabovethesupplycurveofagood.

B. 

Itisthenetgainineconomicwell-beingassociatedwithproducingandsellingtheequilibriumquantityofagood.

C. 

Itisusedtomeasuretheimpactofachangeinpriceontheeconomicwell-beingoftheproducers.

D. 

Itisthedifferencebetweenthevaluethatoneplacesonagoodandthepricepaidforthegood.

2.

RefertoFigure2.1below.Atapriceof$70,theconsumersurplusequals

A. 

$6,000,000.

B. 

$8,000,000.

C. 

$5,000,000.

D. 

$10,000,000.

3.

RefertoFigure2.1.above.Atapriceof$70,theproducersurplusequals:

A. 

$6,000,000.

B. 

$8,000,000.

C. 

$15,000,000.

D. 

$30,000,000.

4.AnincreaseintheimportsofclothingintotheUnitedStatesfromIndiawillbenefitthe_____andhurtthe____. 

A. 

U.S.clothingproducers;Indianclothingproducers

B. 

Indianconsumers;Indianclothingproducers

C. 

U.S.consumers;Indianclothingproducers

D. 

U.S.consumers;theU.S.clothingproducers

5.SupposecountryAandcountryBaretheonlytwocountriesintheworld.CountryAimportsgoodXfromcountryBandexportsgoodY.Intheabsenceofanytransportationcost,attheworldpriceofgoodX:

A. 

countryB'sexportsupplycurveisperfectlyinelastic.

B. 

bothcountryA'simportdemandcurveandcountryB'sexportsupplycurvearepositivelysloped.

C. 

countryA'simportdemandcurvewillbeperfectlyinelastic.

D. 

countryA'simportdemandcurvewillintersectcountryB'sexportsupplycurve.

6.AccordingtotheMercantilists,governmentsshould:

A. 

subsidizeandencourageimports.

B. 

subsidizeandencourageexports.

C. 

allowforfreetradeunencumberedbygovernmentregulationsandrestrictions.

D. 

notspendmuchonnationaldefense.

7.Laborproductivityrefersto:

A. 

thenumberofunitsofoutputthataworkercanproduceinonehour.

B. 

thetotalnumberofunitsofagoodthatallworkersinafirmproduceinoneday.

C. 

thenumberofhoursittakesaworkertoproduceoneunitofoutput.

D. 

thetotalnumberofhoursittakesalltheworkersinafirmtoproduceagivenamountoftheoutputinoneday.

8.Ifacountryexportsthegoodthatitcanproduceatalowopportunitycostandimportsthosegoodsthatitwouldotherwiseproduceatahighopportunitycost,wesaythatsuchtradeisbasedon:

A. 

thetheoryofabsoluteadvantage.

B. 

thearbitragepricingtheory.

C. 

thetheoryoffactorendowments.

D. 

thetheoryofcomparativeadvantage.

9.AbottleofwinecanbeproducedinFrancewith2laborhours,andintheUnitedStateswith4laborhours.ApoundofbeefcanbeproducedinFrancewith1laborhour,andintheUnitedStateswith½laborhours.Whichofthefollowingistrueinthiscontext?

A. 

Francehasacomparativeadvantageintheproductionofbeef.

B. 

Francehasanabsoluteadvantageintheproductionofbeef.

C. 

TheUnitedStateshasanabsolute,butnotacomparativeadvantageintheproductionofbeef.

D. 

TheUnitedStateshasbothcomparativeandabsoluteadvantageintheproductionofbeef.

10.Inatwo-countrytwo-goodmodel,ifacountryhasanabsoluteadvantageintheproductionofacertaingood,itimpliesthat:

A. 

itisnotpossiblethatthiscountrycangainbyimportingthisgoodfromtheothercountry.

B. 

thiscountryalsohasacomparativeadvantageintheproductionofthisgood.

C. 

ithasgreaterresourcesthantheothercountry.

D. 

thiscountryhashigherlaborproductivityintheproductionofthisgood.

11.Whichofthefollowingbestexplainswhyincreasingmarginalcostsofproductionarise?

A. 

Thefactorendowmentsvaryacrosscountries.

B. 

Allthefactorinputsarenotfullyutilizedintheproductionofdifferentcommodities.

C. 

Differentconsumershavedifferenttasteandpreferencesets.

D. 

Differentcommoditiesuseinputsindifferentproportions.

12.Chinahas20%oftheworld'spopulationbutonly10%oftheworld'sfarmableland.WhichofthefollowingwillbepredictedbytheHeckscher-Ohlintheory,ifChinabeginstotradewithothercountries?

A. 

Chinawillexportland-intensivegoodslikewheatandimportlabor-intensivegoodslikeclothing.

B. 

Chinawillshiftresourcesintotheproductionofagriculturalgoodsandawayfrommanufacturedgoods.

C. 

Chinawillshiftresourcesfromtheproductionofagriculturalgoodstotheproductionoflabor-intensivegoods.

D. 

Chinawillexportcapital-intensivegoodslikeautomobilesandimportlabor-intensivegoodslikeclothing.

13.TheUnitedStatesisrelativelycapital-abundantbecause:

A. 

capitalcostsmoreintheUnitedStatesthanintherestoftheworld.

B. 

theUnitedStateshasmorecapitalthantherestoftheworld.

C. 

theUnitedStatesproducesandexportsprimaryproductstotherestoftheworldandimportsmanufacturedgoods.

D. 

theratioofcapitaltootherinputsisgreaterintheUnitedStatesthanthatintherestoftheworld.

14.RefertoFigure4.1.below.IntheabsenceoftradeCanadawill:

A. 

produceandconsumeatpointS1.

B. 

produceandconsumeatpointC0.

C. 

produceatpointS1andconsumeatpointC0.

D. 

produceandconsumeatpointC1.

Inthefiguregivenabove-ABistheproduction-possibilitycurveofCanada.Intheabsenceoftrade,thepriceratiois1bushelofwheat/baleofcottonasshownbythelinePQ.Theinternationalpriceratiois0.25bushelsofwheat/baleofcottonasshownbythelineRS.I1andI2arethepre-tradeandthepost-tradecommunityindifferencecurvesofCanadarespectively.

15.RefertoFigure4.1.above.AfterCanadaengagesinfreetrade,itwill:

A. 

produceatpointS1andconsumeatpointC1.

B. 

produceandconsumeatpointC0.

C. 

produceatpointS1andconsumeatpointC0.

D. 

produceandconsumeatpointC1.

16.

Intheshort-run,followingtheopeningoftrade:

A. 

inputsmoveacrosssectors,butinputreturnsremainconstant.

B. 

factorpaymentsintheimport-competingsectorswilldecline.

C. 

thesupplyofresourcestotheexport-orientedsectorswilldecline.

D. 

workersinallthesectorswillreceivelowerwagesduetocheapimports.

17.

IftradecorrespondstotheHeckscher-Ohlintheory,whichofthefollowingismostlikelytohappeninthelongrunafteralabor-abundantcountryengagesinfreetrade?

A. 

Therateofunemploymentinthecountryismostlikelytoincrease.

B. 

Thetotaloutputintheeconomywilldecline.

C. 

Thecapitaltolaborratiointheexportsectorwillincrease.

D. 

Therentalratesofcapitalwillincreasebutthewagerateswilldecline.

18.TheHeckscher-Ohlintheorypredictsthattheopeningoftradebetweenaland-abundantcountryandalabor-abundantcountryshouldresultin:

A. 

higherrentsandwagesinbothcountries.

B. 

lowerrentsandwagesinbothcountries.

C. 

higherrentsinthelabor-abundantcountryandhigherwagesintheland-abundantcountry.

D. 

higherwagesinthelabor-abundantcountryandhigherrentsintheland-abundantcountry.

19.

TheStolper-Samuelsontheoremindicatesthatgivencertainassumptionsandconditions:

A. 

therealreturntothefactorusedintensivelyintheimport-competingindustrywillriseinthelong-run.

B. 

therealreturntothefactorusedintensivelyintheexportindustrywillfallinthelong-run.

C. 

therealreturntoalltheresourcesinaneconomywillincrease.

D. 

therealreturntothefactorusedintensivelyintheexportindustrywillriseinthelong-run.

20.WhichofthefollowingismostlikelytobepredictedbytheHeckscher-Ohlintheory?

A. 

Theindustrializednationswillmainlyexportlabor-intensivegoods.

B. 

Thedevelopingcountrieswillmainlyexportlabor-intensivegoods.

C. 

Thewagerateofthelow-skilledworkerswillbehigherinthedevelopingcountriesthaninthedevelopedcountries.

D. 

CountriesliketheUnitedStateswillcompletelyspecializeintheproductionofprimarycommodities.

Section2IITrueorFalseQuestions（20marks）

Indicatewhetherthefollowingstatementsaretrueorfalse.Ifthestatementisfalse,provideanexplanationastowhyitisfalse.

1.Freetradeisazero-sumactivitybecauseacountryalwaysgainsattheexpenseofitstradingpartner.

2.Iftheworldpriceishigherthantheno-tradedomesticprice,thendomesticproducersgainanddomesticconsumersloseasaresultoffreetrade.

3.Mercantilistsbelievedthatacountrygainsfrominternationaltradeonlyattheexpenseofanothercountryorcountries. 

4.IfcountryXhasahigherlaborproductivitythantherestoftheworldintheproductionofagood,thencountryXhasacomparativeadvantageintheproductionofthegood. 

5.Accordingtothetheoryofcomparativeadvantage,tradewillnotoccurifonecountryislessefficientintheproductionofallproducts.

6.ThedifferencebetweentheHeckscher-OhlintheoryoftradeandtheRicardianmodelisthattheformerassumesthataneconomyproducesonlytwogoods. 

7.Whenincreasingamountsofavariablefactorareaddedtoafixedfactor,theoutputincreasesbutatadiminishingrate. 

8.AccordingtotheHeckscher-Ohlinmodel,countrieswillengageintradeonlyiftheyhavedifferentproductiontechnologies. 

9.InternationaltradepatternsarebroadlyconsistentwiththeHeckscher-Ohlinpredictionthatnationstendtoexporttheproductsthatusetheirabundantfactorsintensively. 

10