CSU Online FIn333 quiz 3

Part 1 of 1 –

Question 1 of 16

2.0 Points

The Rybczynski theorem states that, given a two-good world
and constant prices, growth in one of a country’s inputs to production will
lead to an increase in production in both the good that uses that input more
intensively in production and the good that uses that input less intensively
in production.

True

False

Question 2 of 16

2.0 Points

Increases in the endowments of the factors of production will
increase current output, but will not contribute to long-run economic growth.

True

False

Question 3 of 16

2.0 Points

The Dutch Disease was an infectious disease that spread from the
Netherlands to Britain, Norway and Australia and caused the depopulation of
these countries.

True

False

Part 1 of 1 –

Question 4 of 16

3.0 Points

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Referring to Figure, the outward shift of the production possibilities
frontier is likely the result of:

A. A fall in production costs.

B. The move from autarky to free trade.

C. An increase in the labor force.

D. An
increase in arable land.

Question 5 of 16

3.0
Points

Which of the following statements is true?

I. Increases in a country’s endowments of land, labor, and capital will lead to
long-run economic growth.
II. Improvements in the technology used in production can lead to increases in
output, but cannot lead to long-run economic growth.
III. Improvements in technology and increases in the endowments of productive
inputs can both cause the production-possibility curve to shift outward.

A. I and II

B. I
and III

C. I, II and III

D. None of the above

Question 6 of 16

3.0
Points

The Rybczynski theorem asserts that in a two-good world, and
assuming that product prices stay constant, growth in the endowment of one
factor of production, with the other factor unchanged, will lead to:

A. An equal percentage increase in the output of both
goods.

B. An
increase in the output of the good that uses the growing factor intensively
and a decrease in the output of the other good.

C. An increase in the output of both goods but a greater
percentage increase in the output of the good that uses the growing factor
intensively.

D. An increase in the output of the good that uses the
growing factor intensively and no change in the output of the other good.

Question 7 of 16

3.0 Points

A capital-abundant country trades two goods with the rest of the
world, medical equipment and corn. Medical equipment is relatively
capital-intensive. An increase in the country’s endowment of capital, with no
change in the price of either medical equipment or corn, will cause the
output of medical equipment to __________ and the output of corn to
__________.

A.
Rise; fall

B. Fall; rise

C. Rise; rise

D. Fall; fall

Question 8 of 16

3.0 Points

Assume a country that produces wine and guns. Both wine and gun
production require inputs of both land and labor. Assume that wine production
is a relatively land-intensive production process while gun production is a
relatively labor-intensive production process. A significant rise in
immigration will likely lead to:

A. An increase in the production of both wine and
guns.

B. Wine production increasing by a greater proportion
than the proportion by which labor increased as a result of the
immigration.

C.
Gun production increasing by a greater proportion than the proportion by
which labor increased as a result of the immigration.

D. Wine production increasing by a greater proportion
than gun production will increase.

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Question
9 of 16

3.0
Points

The development of newly discovered oil reserves in a country:

A. Results in balanced growth.

B. Will cause GDP to fall.

C. Will increase output in all sectors of the
economy.

D. May
cause output in the country’s manufacturing sector to fall.

Question 10 of 16

3.0 Points

Suppose a large country experiences economic growth which leads
to a reduced willingness to trade. The country’s terms of trade will
__________ because the fall in demand for imports will cause the price of its
exports to __________ relative to the price that it has to pay for its
imports.

A. Worsen; fall

B. Improve;
rise

C. Improve; fall

D. Worsen; rise

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Question
12 of 16

3.0 Points

Immiserizing growth occurs when:

A. A country develops a new natural resource such as
oil.

B. A small amount of economic growth leads to a large
improvement in a country’s terms of trade.

C. The benefits from economic growth are not shared by all
residents of the country.

D. Economic
growth leads to a deterioration in a country’s terms of trade whose impact
outweighs the production benefit from growth.

Question
11 of 16

3.0 Points

Suppose a capital-abundant country experiences a significant
increase in its capital stock. This change in endowments will:

A. Lead to an improvement in the country’s terms of
trade.

B. Lead to a decreased willingness to trade.

C. Lead to no change in the country’s willingness to
trade.

D. Lead
to an increased willingness to trade.

Question 13 of 16

3.0
Points

Countries that are open to international trade:

A. Cannot suffer from immiserizing growth.

B. Tend
to grow faster.

C. Tend to lose out on the benefits of diffusion.

D. Do not experience biased growth.

Question 14 of 16

3.0
Points

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The situation
illustrated in Figure is an example of:

A. A small country experiencing a balanced growth.

B. A large country experiencing a balanced growth.

C. A small country experiencing growth biased toward cloth
production.

D. A
large country experiencing growth biased toward wheat production.

Part 1 of 1 –

Question 15 of 16

3.0 Points

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The situation
presented in Figure illustrates:

A. How the openness to trade affects growth.

B. The validity of the product cycle hypothesis.

C. The
immiserizing growth effect.

D. How a small country can benefit from trade.

uestion
16 of 16

8.0
Points

Explain in minimum100-150 words how openness to trade can
influence economic growth in a country.