The gravity model explains why
A) trade between Sweden and Germany exceeds that between Sweden and Spain.
B) countries with oil reserves tend to export oil.
C) capital rich countries export capital intensive products.
D) intra-industry trade is relatively more important than other forms of trade between neighboring countries.
E) European countries rely most often on natural resources.
Question 2 - Which of the following nations DOES use the euro and participates in the Treaty on European Union?
A) Sweden
B) Denmark
C) Portugal
D) The United Kingdom
E) Norway
Question 3 - A country in autarky does not trade.
Indicate whether the statement is true or false
Question 4 - If an economy experiences an increase in its labor force, everything else constant, then at constant world prices, it will
A) produce more of the labor intensive good and less of the capital intensive good.
B) produce more of both goods.
C) produce the same amount of both goods.
D) produce less of the labor intensive good and more of the capital intensive good.
Question 5 - The best way to address differences in labor and environmental standards is through trade barriers.
Indicate whether the statement is true or false
Question 6 - Suppose that a country is producing on its PPC at a point to the left of the tangency between the trade line and the PPC. At the production point,
A) the opportunity cost in production of the good on the horizontal axis is less than its trade price.
B) the opportunity cost in production of the good on the horizontal axis is more than its trade price.
C) the opportunity cost in production of the good on the vertical axis is less than its trade price.
D) the opportunity cost in production of the good on the horizontal axis may be either less than or more than its trade price.
E) the opportunity cost in production of the good on the vertical axis equals its trade price.
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