Demand and supply, offer curves, and the terms of trade
TRUE or FALSE TYPE QUESTIONS
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4.Quize- Bu səhifədəki naviqasiya:
- TRUE or FALSE
- ESSAY TYPE QUESTION
- ANALYTICAL QUESTION
| TRUE or FALSE TYPE QUESTIONS
TRUE or FALSE: Increasing opportunity costs mean that the production possibilities frontier is convex from the origin. TRUE or FALSE: Increasing opportunity costs mean that the slope of the production possibilities frontier decreases as one moves down to the right. TRUE or FALSE: Increasing opportunity costs mean that the slope of the production possibilities frontier decreases as one moves down to the right. TRUE or FALSE: Increasing opportunity costs mean that the slope of the production possibilities frontier decreases as one moves down to the right. TRUE or FALSE: Community indifference curves can cross each other. TRUE or FALSE: The marginal rate of substitution is the same along an indifference curve. TRUE or FALSE: In the absence of trade, a nation is in equilibrium when it reaches the highest indifference curve possible given its production frontier. TRUE or FALSE: The difference in relative commodity prices between two nations is a reflection of their comparative advantage. TRUE or FALSE: Specialization will stop when relative commodity prices are equal in both nations and at that point trade is in equilibrium. TRUE or FALSE: With increasing costs, a nation is not able to consume beyond its production frontier. TRUE or FALSE: With trade each nation will produce more of the commodity of its comparative advantage. ESSAY TYPE QUESTION Explain how comparative advantage and international trade may arise from differences in factor endowments between countries and differences in factor intensities between commodities. Explain the significance of increasing returns to scale and product differentiation for international trade. ANALYTICAL QUESTION Draw the offer curves for Nation 1 and Nation 2, showing that Nation 2 is a small nation that trades at the pre-trade-relative commodity prices in Nation 1. How are the gains from trade distributed between the two nations? Why? (ch02.doc) 2- Dominick Salvatore Yüklə 51 Kb. Dostları ilə paylaş:
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