The terms of trade is given by the prices ?

A. Paid for all goods exported by the home country
B. Received for all goods exported by the home country
C. Received for exports and paid for imports
D. Of primary products as opposed to manufactured products

If the relative price (MRT) of S were to increase, then the price line would ?

A. Shift out in a parallel fashion
B. Shift in a parallel fashion
C. Become steeper
D. Become flatter

If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ?

A. Constant opportunity costs
B. Decreasing opportunity costs
C. First increasing and then decreasing opportunity costs
D. Increasing opportunity costs

In autarky, the relative price of X, in terms of Y in A would be ?

A. 1/2 y
B. 3/4 y
C. 1 y
D. 4/3 y

In autarky, the relative price of wine, in terms of beer, in country A is ?

A. 1w = 1b
B. 1w = 2b
C. 1w = 3b
D. 1w = 1/3b

Country A has the comparative advantage in ?

A. Wine
B. Beer
C. Both wine and beer
D. Neither wine nor beer

The Relative price (MRT)of S in terms of T i ?

A. 2
B. 1/2
C. 00
D. 1000

Country A has an absolute advantage in__________?

A. Product x
B. Product y
C. Neither x nor y
D. Both x and y

If the countries were to trade along the lines of absolute advantage ?

A. A would export x to b
B. B would import y from a
C. Neither country would want to trade
D. None of the above

The classical trade theories of Smith and Ricardo predict that ?

A. Countries will completely specialize in the production of export goods
B. Considerable trade will occur between countries with different levels of technology
C. Small countries could obtain of the gains from trade when trading with large countries
D. All of the above