International Economics - The Final Quiz - Part 3

6 Questions

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Economics Quizzes & Trivia

Questions and Answers
  • 1. 
    The learning-by-doing effect differs from the economies of scale for the meaning of the cumulative output.
    • A. 

      True

    • B. 

      False

  • 2. 
    Referring to a specific situation (the blue line), that represents the production possibility frontier of a country that produces High-Tech products (HT), capital intensive, and agrcultural ones, labor intensive, what types of effect could the other two lines represent?
    • A. 

      Red: Learning-by-doing; Blue: Increase in the consumption of HT goods

    • B. 

      Red: Natural Growth; Blue: Increase in the price of labor

    • C. 

      Red: Learning-by-doing; Blue: Elimination of the tariffs in the HT sector trade

    • D. 

      Red: Investments in high-school education; Blue: Learning-by-doing

  • 3. 
    Which of these is FALSE about market distortions:
    • A. 

      Usually decrease GDP

    • B. 

      Slow down the growth

    • C. 

      Discourage company from investing in the country

    • D. 

      Are often used as mean of negotiation with lobby inside the country.

    • E. 

      All of them are true

  • 4. 
    Referring to the product lifecycle model of trade, the comparative advantage of the innovating country lasts until:
    • A. 

      The total production abroad overcomes the demand abroad

    • B. 

      The total production abroad overcomes the demand in the innovating country

    • C. 

      The total production abroad overcomes the production in the innovating country

    • D. 

      The total production abroad starts

    • E. 

      None of these

  • 5. 
    If two countries have firms in the same industry, country X produces n varieties of a specific product, while country Y produces m varieties (supposing each of these not produced in X), opening to trade will be more likely to occur:
    • A. 

      X o Y will specialize in that sector producing all the varieties required by the market, and the other country will specialize in another sector.

    • B. 

      The varieties in the market will be m + n.

    • C. 

      The varieties in the market will be lower than m + n but higher than m and n.

    • D. 

      Each countries will still produce their varieties.

    • E. 

      None of these

  • 6. 
    The definition of Intra industry trade is: Trade within one or more country regarding goods of the same industries, but across different varieties; driven by characteristics of the varieties.
    • A. 

      True

    • B. 

      False