Which of the following holds true if a country is said to have a comparative advantage in the ...

Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?
 a. The country can produce more wheat than any other nation.
  b. The opportunity cost of producing wheat is the lowest in the country.
  c. The price of wheat is the lowest in that country.
  d. Domestic wheat is of the best quality in the world.
  e. The country can produce only wheat.

Question 2

A subsidy in an industry would result in:
 a. an increase in consumer surplus.
  b. an increase in producer surplus
  c. both (a) and (b).
 d. none of the above.

Question 3

A movement up along a short run Phillips Curve to an unemployment rate below the natural rate of unemployment will tend to shift the Phillips Curve up, once expectations adjust; a movement down along a short run Phillips Curve to an unemployment rate above the natural rate of unemployment will tend to shift the Phillips Curve down once expectations adjust.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 4

Quotas are designed to:
 a. restrict export of domestic goods to foreign markets.
  b. protect domestic producers from higher sales tax.
  c. increase foreign demand for domestic products.
  d. increase domestic demand for foreign products.
  e. protect domestic producers from foreign competition.

Question 5

Welfare effects are the gains and losses associated with ____ in markets.
 a. supply shocks
 b. government intervention
  c. excess production
 d. demand supply gap

Question 6

The natural rate hypothesis states that the economy will self-correct back to the natural rate of unemployment, so that a move along a short run Phillips curve will not be permanent.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 7

Which of the following is true of import-substitution strategies?
 a. They dominate the strategies of the developing world.
  b. They focus on the production of goods not produced in developed countries.
  c. They focus on the production of exportable goods.
  d. These strategies lower the price of the domestically produced goods than the imported goods.
  e. They generally require the removal of import barriers like tariffs or quotas.

Question 8

Which of the following is true?
 a. A lower price will increase your consumer surplus by the amount you were buying originally, times the reduction in the price.
  b. A lower price will leave unchanged your consumer surplus for each of the units you were already consuming, but will increase consumer surplus from increased purchases at the lower price.
  c. A lower price will decrease your producer surplus for each of the units you were producing, but will not change producer surplus by changing the quantity sold.
  d. None of the above is true.

Question 9

A positive supply shock causes a leftward shift in the SRAS curve.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 10

Which of the following is true about producer surplus?
 a. Producer surplus is how much more it costs sellers than they are paid.
 b. Producer surplus is shown graphically as the area under the demand curve but above the supply curve.
  c. An increase in the market price due to an increase in demand will increase producer surplus.
 d. All of the above are true about producer surplus.

Question 11

The primary objective of inward-oriented strategies is:
 a. to raise government revenue through tariffs and other import taxes.
  b. to lower the domestic price of imports.
  c. to replace imported manufactured goods with domestic goods.
  d. to encourage imports through reduction of tariff and non-tariff barriers.
  e. to encourage the production of those goods in which the country has an absolute advantage.