Exam (elaborations)
Econ 340 Exam 1 Msu Detailed Questions And Expert Answers
- Course
- ECON 340
- Institution
- University Of Michigan
Econ 340 Exam 1 Msu Detailed Questions And Expert Answers
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Econ 340 Exam 1 Msu Detailed QuestionsAnd Expert Answers
Trade balance - ANS The difference between the total value of a country's exports
and the total value of its imports is defined as the nation's
trade deficit - ANS An excess of imports over exports
Recent bilateral trade figures alarm politicians who worry about China's growing
trade imbalance with the United States. Which of the following statements is
correct about the U.S.-China bilateral trade balance? - ANS It is not as bad as the
numbers appear because China imports a large percentage of the value of its
exports to the United States from its other trading partners.
trade to GDP ratio formula - ANS (exports + imports) * 0.5 / GDP
Suppose that a country has a low ratio of trade to GDP. Which of the following
may be a possible explanation for this? - ANS high tariffs and far away from other
countries
After 1945, world trade - ANS grew more rapidly than in the decade before World
War II.
, Which of the following is NOT a reason why countries trade goods with each
other? - ANS differences in countries' languages and cultures
David Ricardo believed that - ANS all nations can gain from free international
trade.
According to the Ricardian principle of comparative advantage, international trade
increases nations' total output because: - ANS resources are reallocated to achieve
higher production efficiency after trade.
Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats. If the economy
has 100 workers, then the economy can produce: - ANS 500 tennis rackets or 400
baseball bats.
What is the opportunity cost of cloth in terms of wheat in this example? - ANS
mpl_w /mpl_c
Which point on the diagram represents the "home" equilibrium in the absence of
international trade? - ANS equilibrium point in the middle of the graph and usually
represented by A
Assume that two countries (Home and Foreign) each produce two goods (corn and
wheat) under constant cost production. Home produces 0.5 ton of corn or 1 ton of
wheat with a day of labor. Without trade (in autarky), Home's daily production is
20 tons of wheat and 10 tons of corn. What is Home's price of corn in autarky? -
ANS wheat / corn which is 2
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