The consumption of public goods is
a. excludable and rivalrous
b. excludable and non-rivalrous
c. non-excludable and rivalrous
d. non-excludable and non-rivalrous
Question 2Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following would be mutually beneficial terms of trade between Karl and Adam?
a. 1 ton of apples per 2 1/2 tons of oranges
b. 1 ton of apples per 1 1/2 tons of oranges
c. 1 ton of apples per 1/4 ton of oranges
d. 1 ton of apples per 1/5 ton of oranges
Question 3The export supply curve shows a country's:
a. domestic surplus at various prices below the no-trade equilibrium price.
b. domestic shortage at various prices below the no-trade equilibrium price.
c. domestic supply at the no-trade equilibrium price.
d. domestic surplus at various prices above the no-trade equilibrium price.
e. domestic shortage at various prices above the no-trade equilibrium price.
Question 4If the government required car makers to install more costly and effective emission control devices on cars, it will lead to:
a. a higher price of cars and a larger quantity of cars sold.
b. a higher price of cars and a smaller quantity of cars sold.
c. a lower price of cars and a larger quantity of cars sold.
d. a lower price of cars and a smaller quantity of cars sold.
Question 5Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true?
a. Adam has an absolute advantage in oranges and a comparative advantage in apples.
b. Karl has an absolute advantage in oranges and a comparative advantage in oranges.
c. Karl has an absolute advantage in both apples and oranges.
d. Karl has an absolute advantage and a comparative advantage in apples.
Question 6The import demand curve shows the amount of the home country's:
a. surplus at various prices below the no-trade equilibrium.
b. shortage at various prices below the no-trade equilibrium.
c. equilibrium no-trade quantity demanded.
d. surplus at various prices above the no-trade equilibrium.
e. shortage at various prices above the no-trade equilibrium.
Question 7If the production of a good created both external costs and external benefits, but the external costs were greater, without government intervention, a market economy will:
a. not produce the product at all.
b. overproduce the product.
c. underproduce the product.
d. produce the optimal amount of the product.
Question 8Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of oranges for 1/3 of a ton of oranges
b. 1 ton of apples for 3 1/3 tons of oranges
c. 1 ton of apples for 2 tons of oranges
d. 1 ton of oranges for 0.4 tons of apples
Question 9If the world price is below the domestic no-trade equilibrium price, then with international trade:
a. the domestic shortage can be eliminated by rationing.
b. the domestic surplus can be consumed at home.
c. the domestic surplus can be exported to the rest of the world.
d. the domestic quantity demanded is equal to that supplied by the world.
e. the domestic shortage can be met by foreign imports.
Question 10In a competitive economy with no government sector:
a. goods with spillover benefits will not be produced at all.
b. there will be too few public goods produced.
c. goods with spillover costs will be underproduced.
d. too few resources be allocated to each industry.
Question 11Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of apples for 3 tons of oranges
b. 3 tons of apples for 3 tons of oranges
c. 2 tons of apples for 3 tons of oranges
d. 1 ton of oranges for 0.2 tons of apples
Quick Reply
