Download Quiz Answer Key for Econ103 Fall 2008 - Questions and Topics Covered and more Quizzes Introduction to Macroeconomics in PDF only on Docsity! Quiz 4 Answer Key (10 points) – Econ103 – Fall 2008 – TA Emilie Bagby 1 NAME: _____________________________________________________________SECTION:_______________________ Part I – Multiple choices questions (Questions 1-7) 1. Canada is said to have an absolute advantage vis-à- vis the U.S. in the production of cod because it can produce cod a. in larger quantities b. while the U.S. can't c. at a lower opportunity cost d. with fewer resources e. at a higher opportunity cost 2. Exhibit EE-2 depicts the production possibilities curves of wheat and corn for Nabia and Pada. If these countries engage in trade, which country will produce what? a. Both Nabia and Pada will produce Wheat b. Neither Nabia nor Pada will produce Wheat c. Nabia will specialize in Corn and Pada will specialize in Wheat d. Nabia will specialize in Wheat and Pada will specialize in Corn 3. Based on Exhibit EE-2, if these countries engage in trade, the exchange rate corn for wheat must fall between a. 1 corn = 4 wheat to 1 corn = 3 wheat b. 1 corn = 1/4 wheat to 1 corn = 1/3 wheat c. 1 corn = 3 wheat to 1 corn = 1 wheat d. 1 corn = 1/3 wheat to 1 corn = 1/4 wheat e. 1 corn = 1 wheat to 1 corn = 2 wheat 4. A tariff is a tax on ________ goods that is designed to ________. a. exported; protect domestic industries b. exported; hurt foreign industries c. imported; make domestic consumers pay more d. imported; protect domestic industries e. domestic; discourage imports 5. True or False: The WTO always forces developing countries to reciprocate tariff reductions agreed upon by industrial nations. a. True b. False 6. In less developed countries, disguised unemployment refers to workers a. who are temporarily employed by the government to build infrastructure b. who are unemployment in rural areas, but who are not recorded in the unemployment rate c. who receive low wages in urban areas d. who receive unemployment insurance e. whose labor do not add output to the agriculture sector (their marginal productivity is zero) 7. The vicious circle of poverty associated with LCDs refers to a. their ability to borrow but inability to pay their debts. b. their traditional sector becoming modern only to revert back to traditionalism. c. their misuse of capital goods over and over again d. their being poor because they choose population growth over economic growth e. their being poor because they cannot devote resources to capital goods because they are poor Part II - Short answer questions (Questions 8-10) Some questions on the reverse Side Consider the table below in answering question 8. steel Cloth France 5 3 England 4 5 The numbers in the table are the amount of labor-hours needed to make one unit of the good. 8. With international trade, France and England specialize, respectively, in ____Cloth_________ and ____Steel__________. b/c in France: 1 steel = 5/3 cloth and 1 cloth = 3/5 steel in UK: 1 steel = 4/5 cloth and 1 cloth = 5/4 steel The opportunity cost for producing cloth is lower in France and the opportunity cost for producing steel is lower in the UK.
