Econ 5 Quiz

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INCORRECT | | Over the past several years, the volume of world trade has: | | | A) | decreased because of increased government regulation of trade through tariffs and quotas | | | B) | decreased because of the decline in incomes brought on by global recession | | | C) | increased because of increased government regulation of trade through tariffs and quotas | | | D) | increased because of improvements in communications and transportation | | | | | | Feedback: Trade has increased for two important reasons— a worldwide reduction in tariffs and the advent of new technologies in communications and transportation. | | 2 CORRECT | | A tariff: | | | A) | raises the price of imported goods, increasing the…show more content…
| | 5 INCORRECT | | Which of the following will tend to increase U.S. exports to Mexico and reduce Mexican exports to the U.S.? | | | A) | A decrease in the dollar price of the peso | | | B) | An appreciation of the dollar relative to the peso | | | C) | A depreciation of the peso relative to the dollar | | | D) | An increase in the dollar price of the peso | | | | | | Feedback: An increase in the dollar price of the peso—an appreciation of the peso and depreciation of the dollar—reduces the price of U.S. exports and increases the price of Mexican exports. | | 6 INCORRECT | | Answer the next question on the basis of the following production possibilities tables for countries Alpha and Beta: In Beta, the domestic opportunity cost of one unit of good X is: | | | A) | 1 unit of Y | | | B) | 1.5 units of Y | | | C) | 2 units of X | | | D) | 3 units of Y | | | | | | Feedback: In Beta, increasing X production by 2 units requires the sacrifice of 3 units of Y. Therefore each one unit of X would require sacrificing 1.5 units of Y. | | 7 INCORRECT | | Answer the next question on the basis of the following production possibilities tables for countries Alpha and Beta: According to the concept of comparative advantage: | | | A) | Alpha should specialize in the production of X; Beta in the production of Y

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