chapter 5 tmqt

The concept “terms of trade” means

• the amount of exports sold by a country.

• the price conditions bargained for in international markets.

• the price of a country's exports divided by the price of its imports.

• the quantities of imports received in free trade.

• None of the above.

A country cannot produce a mix of products with a higher value than where

• the isovalue line intersects the production possibility frontier.

• the isovalue line is tangent to the production possibility frontier

• the isovalue line is above the production possibility frontier.

• the isovalue line is below the production possibility frontier

• the isovalue line is tangent with the indifference curve.

Tastes of individuals are represented by

• the production possibility frontier.

• the isovalue line.

• the indifference curve

• the production function.

• None of the above.

If PC / PF were to increase in the international marketplace, then

• all countries would be better off.

• the terms of trade of cloth exporters improve

• the terms of trade of food exporters improve.

• the terms of trade of all countries improve.

• None of the above

If PC / PF were to increase,

• the cloth exporter would increase the quantity of cloth exports.

• the cloth exporter would increase the quantity of cloth produced

• the food exporter would increase the quantity of food exports.

• Both A and C.

• None of the above.

If PC / PF were to increase,

• world relative quantity of cloth supplied and demanded increases.

• world relative quantity of cloth supplied and demanded decreases.

• world relative quantity of cloth supplied increases..

• world relative quantity of cloth demanded decreases .

• None of the above.

When the production possibility frontier shifts out relatively more in one direction, we have

• biased growth

• unbiased growth

• immiserizing growth.

• balanced growth

• imbalanced growth

Export-biased growth in Country H will

• improve the terms of trade of Country H

• trigger anti-bias regulations of the WTO.

• worsen the terms of trade of Country F (the trade partner).

• improve the terms of trade of Country F

• decrease economic welfare in Country H

Immiserizing growth is

• likely to occur if the exporting country is poor.

• likely to occur if the exporting country is rich.

• likely to occur when terms of trade change

• likely to occur if relative supplies are elastic.

• None of the above.

If the U.S. Agency for International Development transfers funds to poor countries in Sub-Saharan Africa, this must

• worsen the U.S. terms of trade.

• improve the U.S. terms of trade.

• worsen the terms of trade of the African aid recipients

• improve the terms of trade of the African aid recipients.

• None of the above