Question # 1

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

Which of the following is often considered to be inconsistent with the notion of perfect competition.

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Large number of firms

Free entry

Complete mobility

None of these

A politician proposes reducing business taxes, a move she says will encourage risk taking entrepreneurship This proposed cut in business taxes is intended to stimulate the economy mainly though.

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An increase in aggregate supply

A decrease in aggregate supply

A decrease in aggregate demand

An increase in aggregate demand

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.

The overall Budget Deficit is financed from

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External borrowing

Non bank borrowing domestically

Bank borrowing plus the above two at a and b

None of the above

International trade during the 19th century was characterized by.

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Extensive barriers to trade

Operation of the gold standard

A small volume of international trade

None of these

In pure competition.

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Strong rivaled exist

Cartels are formed

Both a and b

None of thes

A market is in equilibrium when

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Ac = P

MC = MR

AC =AR

TC =TR

____________ represents the difference between what consumers have to pay for a product and what they are willing and able to pay.

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Producer surplus

Deadweight surplus

Government surplus

Consumer surplus

An important policy instrument to influence commercial banks is.

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Open market operations

Changing reserve ratios of commercial banks

Moral persuasion

None of the above

An Engel curve is based on which one of the following assumptions.

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Constant prices, very incomes

Constant price, constant income

Constant incomes, varying prices

None of these

The funds used for further investment in joint stock company refers to.

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Distributed

Undistributed

Remaining

All of the above

A change in the full employment quantity of labor_________ the short run aggregate supply curve and ______ the long run aggregate supply curve.

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shifts ; shifts

shifts ; does not shift

does not shift ; shift

does not shift ; does not shift

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

Ad valorem tariffs are collected as

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Fixed amounts of money per unit traded

A percentage of the price of the product

A percentage of the quantity of imports

All of the above

Non tariff trade barriers could include all of the following except

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Domestic content laws

Government procurement policies.

Health , safety and environmental standards

Autidumpiing /countervailing duties applied to imports

Industrial polices intended to foster comparative advantage for domestic industries could result in the implementation of.

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Research and development subsidies

Loan guarantees

Low interest rate loans

All of the above

A straight line downward sloping demand curve implies that as price falls the elasticity of demand.

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Increases

Decreases

Remain the same

None of these

The impact and incidence of sales tax is

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On the consumer

On the seller

On the producer

None of these

Devaluation leads to.

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Increase in imports

Increase in exports

Decline in imports

None of the above

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

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