Economics Gr.11A

Which of the following factors influence trade?

• The stage of development of a product.

• Government.

• The relative price of factors of productions.

• All of the above.

The U.S. can produce 50 cars and 25 tools. Peru can produce 20 cars and 15 tools who has the absolute advantage in tools?

• Peru

• U.S.

• neither

• not enough info

According to the theory of comparative advantage, which of the following is not a reason why countries trade?

• Comparative advantage.

• Costs are higher in one country than in another.

• Prices are lower in one country than in another.

• Exports give a country a political advantage over other countries that export less

According to the theory of comparative advantage, a country will export a good only if

• It can produce it using less labor than other countries.

• Its productivity is higher in producing the good than the productivity of other countries in producing it.

• Its wage rate in producing the good is lower than in other countries.

• Its cost of producing the good, relative to other goods, is at least as low as in other countries.

Microeconomics deals with the study of __________economic entities.

• Aggregate

• Individual

• Macro

• Socio

What is a stagflation?

• A situation in which the economy experiences recession.

• A situation in which the economy have inflation and recession altogether

• An economy where unemployment is high

• Both 2 and 3

Which of the following statements is true?

• GDP measures the value of all the goods and services produced in the economy.

• GDP stands for gross domestic product.

• GDP excludes intermediate goods and services.

• GDP equals wages plus trading profits.

Inflation is a state where price rises and value of money ...............................

• Rises

• Falls

• Remains constant

• Becomes zero

Which of the following concept is just opposite to deflation?

• Stagflation

• Inflation

• Recession

Suppose Countries A and B use only labour as an input and produce only cloth and wheat. In A, a worker in a day could produce 2 units of cloth or 4 units of wheat. In B, a worker in a day could produce 3 units of cloth or 9 units of wheat. At present the countries do not trade. Which of the following statements is false?

• Country A has a comparative advantage in cloth.

• Country A has an absolute advantage in cloth.

• Country B has an absolute advantage in wheat.