Question # 1

That the division of labor is limited by the size of the market best applies to which explanation of trade.

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Factor endowment theory

Product life cycle theory

Economies of scale theory

Overlapping demand theory

Which of the following would most likely shift the production possibilities curve for a nation outward.

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A reduction in unemployment

An increases in the production of capital goods

A reduction in discrimination

An increase in the production of consumer goods

In the classical model of Ricardo the direction of trade is delemined by.

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Absolute advantage

Comparative advantage

Physical advantage

Which way the wind blows

In oligopoly market seller are.

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Few

Four

Some

A large number

If there is a price floor there will be

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Shortages

Surpluses

Equilibrium

None of these

The larger the required reserve ratio the.

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Smaller is the deposit multiplier

Larger is the deposit multitier

Larger is the amount of total deposits that can created from a new deposit

Larger is the amount of total money that can be created from a withdrawal

The multiplier for a change in social security benefits is equl to the multiplier for a change in the same direction in salaries of Evanston police officers tiems.

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the marginal propensity to save

Minus the marginal propensity to save

The marginal propensity to consume

Minus the marginal propensity to consume

Indifference curves shows various combinations of.

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One commodity

Two

Three

All of these

In the balcne of payments, travel and tourism are included int he category of.

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Unilateral transfers

Capital account

Merchandise account

Services account

International trade forces domestic firms to become more competitive in terms of.

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The introduction of new products

Product design and quantity

Product price

All of the above

an more labor is added to a fixed amount of input the rate at which output goes up begins to decrease This is called.

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Diminishing marginal utility

Diminishing marginal productivity

Diminishing marginal costs

Diminishing marginal profit

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a

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Domestic subsidy

Export subsidy

Import quota

Export quota

The largest trading partner of Pakistan is

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Italy

US

USA

None of these

The production function will be affected by changes in the prices of.

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Inputs

Outputs

Neither

All of the above

All economic model ae based on

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Realistic assumptions

Assumptions which can never be perfectly realistic

Unrealistic assumptions

None of the above

When unintended investment is positive

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Output tends to rise

Output tends to fall

Output is in equilibrium

None of these

Export led growth strategies tend to emphasize.

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Resource allocation based on the principle of absolute advantage.

Resource allocation based on the principle of comparative advantage.

Trade protection for exporting competing firms

Trade protection for import competing firms

Which of the following strategies have developing countries not used to deal with the problem of unstable expert markets.

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Multilateral contracts

Production and export controls

Buffer stock arrangements

Tariff rate quotes

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

the theory of overlapping demands predicts that trade in manufactured goods is unimportant by countries with very different .

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Tastes and preferences.

Expectations of future interest rate levels

Per capita income levels

Labor productivities.

Absolute advantage is determined by.,

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Actual difference in labor productivity between countries.

Relative difference in labor productivity between countries.

Both a and b

neither a and b

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