Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn. Suppose that opportunity costs are constant. Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?
A) Paraguay trades one corn to Bolivia for three units of wheat.
B) Bolivia trades one corn to Paraguay for three units of wheat.
C) Bolivia trades one corn to Paraguay for one wheat.
D) Paraguay trades one wheat to Bolivia for two corn.
Question 2 - From 1960 to 2012
A) the U.S. economy roughly tripled in size.
B) U.S. imports roughly tripled in size.
C) the share of US Trade in the global economy roughly tripled in size.
D) U.S. Imports roughly tripled as compared to U.S. exports.
E) U.S. exports roughly tripled in size.
Question 3 - The goal of the Single European Act (or Europe 1992 initiative) is to
A) develop uniform product standards for all EU countries.
B) remove nontariff barriers to trade between EU countries.
C) deregulate economic activities in transportation and financial services.
D) All of the above.
Question 4 - If factors of production cannot flow between countries
A) there is no reason to expect that wages should be equal worldwide.
B) multinational corporations would not exist.
C) trade in goods could still occur.
D) All of the above.
Question 5 - Refer to the figure above, which shows a country's possible production possibility frontiers and indifference curves. If the country is producing at ________, then moving to ________ will cause utility to ________.
A) point c; point b; remain unchanged
B) point a; point b; increase
C) point c; point b; increase
D) point c; point b; decrease
E) point a; point c; remain unchanged
Question 6 - A lender of last resort
A) makes loans when no one else will.
B) makes loans without regard for risk.
C) is a firm that is forced to make loans for its own survival.
D) Both A and B.
E) None of the above.
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