Rowan University

ZAX 121

Econ Pre-Test Chap 5

1)Refer to the above tables. The domestic opportunity cost of one unit of X in Alpha is:

1. 1. 2 units of Y.
   2. 4 units of Y.
   3. 1 unit of Y.
   4. 3 units of Y.

2. Refer to the above data. If Alpha and Omega each were producing at alternatives B before trade, the gain from specialization and trade would be:
   1. 30 tons of wheat.
   2. 15 tons of steel.
   3. 30 tons of steel and 30 tons of wheat.
   4. 60 tons of wheat and 60 tons of steel.

3. The physical import of DVD players to the United States from Japan best illustrates a:
   1. resource flow.
   2. financial flow.
   3. trade flow.
   4. technology flow.

Prof Keep Econ Pre-Test Chap 5 ed 17 Page 2 of 6

4. Which of these groups of nations are all members of the Euro Zone?
   1. Great Britain, France, and Switzerland
   2. Denmark, Sweden, and Norway
   3. France, Germany, and Italy
   4. Russia, Poland, and Hungary
5. (Consider This) If the price of tickets for fair rides increases from $.50 to $1 and the same number of tickets are required for each ride as before:
   1. the dollar has appreciated relative to fair tickets.
   2. the dollar price of the fair rides has declined.
   3. the dollar has depreciated relative to fair tickets.
   4. dollar ticket exchange rate has changed from $1 equals ½ ticket to $1 equals 1 ticket.
6. Refer to the above data. On the basis of the above information:
   1. Alpha should export both steel and wheat to Omega.
   2. Omega should export both steel and wheat to Alpha.
   3. Omega should export steel to Alpha and Alpha should export wheat to Omega.
   4. Alpha should export steel to Omega and Omega should export wheat to Alpha.
7. Which of the following concepts provides the basic rationale for international trade?
   1. increasing opportunity costs.
   2. consumer sovereignty.
   3. comparative advantage.
   4. the law of supply.
8. If the Japanese yen appreciates relative to the Swedish krona, then the krona:
   1. will be more expensive to the Japanese.
   2. may either appreciate or depreciate relative to the yen.
   3. will appreciate relative to the yen.
   4. will depreciate relative to the yen.
9. Appreciation of the Mexican peso will:

9. 1. make Mexico's exports and imports both more expensive.
   2. make Mexico's exports more expensive and its imports less expensive.
   3. make Mexico's exports less expensive and its imports more expensive.
   4. increase Mexican exports.
10. Since 1975, United States exports and imports have:
    1. grown absolutely, but remained a constant proportion of GDP.
    2. grown absolutely, but declined as a proportion of GDP.
    3. grown both absolutely and as a percentage of GDP.
    4. declined both absolutely and as a percentage of GDP.

Prof Keep Econ Pre-Test Chap 5 ed 17 Page 3 of 6

11. About half of United States international trade is with:
    1. other industrially advanced capitalist countries.
    2. the OPEC countries.
    3. developing countries.
    4. Russia and China.
12. The building of a production plant in China by an American firm best illustrates a(n):
    1. trade flow.
    2. resource flow.
    3. financial flow.
    4. information flow.
13. Exchange rates are particularly important because:
    1. they present a challenge to financial speculators.
    2. they link the price levels of various nations to one another.
    3. they represent exceptions to the laws of demand and supply.
    4. equilibrium is never achieved in such markets.
14. Which of the following countries has recently emerged as one of the world's top trading nations in terms of total trade volume?
    1. Chile
    2. India
    3. Ireland
    4. China
15. American exports and imports of goods and services each are about what percentage of GDP?
    1. 4-6 percent
    2. 25-28 percent
    3. 11-16 percent
    4. 30-32 percent
16. Refer to the above data. The domestic opportunity cost of producing 1 ton of steel in Alpha is:
    1. ½ ton of wheat.
    2. 1 ton of wheat.
    3. 15 tons of wheat.
    4. 30 tons of wheat.
17. NAFTA refers to the:
    1. National Association of Free Trade Agencies.
    2. National Alliance for Foreign Trade and Assistance.
    3. North American Free Trade Agreement.
    4. Northern Alliance For Tariff Adjustment.

Prof Keep Econ Pre-Test Chap 5 ed 17 Page 4 of 6

18. The World Trade Organization (WTO):
    1. sets tariffs to balance international trade among nations.
    2. is the successor to GATT.
    3. is better known as the European Union.
    4. sets exchange rates to balance international trade among nations.
19. All else equal, U.S. exports to Germany create a:
    1. demand for German marks.
    2. supply of German marks.
    3. supply of American dollars.
    4. shortage of German marks.

Answer the next question(s) on the basis of the following table which indicates the dollar price of luta, the currency used in the hypothetical economy of Luteland:

20. Refer to the above table. The exchange rate in this market is: