ECO344



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International trade is the exchange across
	borders of goods, services, and
factors
Answer: comparative

In	equilibrium, the ratio of
private marginal costs is equal to the competitive price ratio
Answer: competitive

A fundamental concept in international trade theory is	advantage
Answer: national

If the capital-labor ratio in Country A is greater than it is in Country B, we say that Country A is relatively	
Answer: capital-abundant

International economics can be divided conveniently into trade theory and
Answer: international finance

The assumption of	of capital
implies an economy in which industries can convert one kind of capital into another
Answer: perfect mobility

The	possibility curve is a graph
showing the possible combination of two goods with constant resources and technology.
Answer: production

The desire for luxury, show-off for higher standard of living and patterns of consumption of advanced countries is referred to as	
Answer: demonstration effect

The point at which the lowest point of indifference curve touches the budget line referred to consumer
Answer: equilibrium.

The gains from trade can be conveniently broken down into gains from from exchnage and
Answer: gains from specialization.

	refers to an economyVs
ability to produce goods and services at a lower opportunity cost.
Answer: comparative advantage

	argur that if wages rose above
subsistence, the number of workers would increase and bring the wage rates down
Answer: subsistence theorists

One of the factors affecting gains from trade is
Answer: all the options

The assumption that factor markets are
	, implies that firms pay each
factor the value of its marginal product
Answer: perfectly competitive

The gains from trade can be broken down into gains from two distinct sources: gains from exchange and gains from	
Answer: specialization

	equilibrium tries to give an
understanding of the whole economy using a \
Answer: general equilibrium

The theorem that states that if two countries produce both goods in common,is the ratio of an index of a
countryVs export prices to an index of its import prices
Answer: terms of trade

 real factor prices will become identical as well.
Answer: factor endowment

It describes the relationship between relative prices of output and relative factor rewards
Answer: stolper–samuelson theorem

is a type of tax on import or export
Answer: sales tax

is the ratio of an index of a
countryVs export prices to an index of its import prices
Answer: terms of trade




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Whatsapp: 08131667008