International Economics 15th Edition by Robert Carbaugh – test Bank

International Economics 15th Edition by Robert Carbaugh – test Bank

Chapter 07

1. Which of the following is not a major factor that encourages developing nations to form international commodity agreements?
a. Inelastic commodity supply schedules
b. Inelastic commodity demand schedules
c. Export markets that tend to be unstable
d. Secular increases in their terms of trade
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Trade Problems of the Developing Nations
KEYWORDS: BLOOM’S: Knowledge

2. International commodity agreements do not:
a. Consist of consuming and producing nations who desire market stability
b. Levy export cutbacks so as to offset rising commodity prices
c. Utilize buffer stocks to generate commodity price stability
d. Increase the supply of commodities to prevent rising prices
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Trade Problems of the Developing Nations
KEYWORDS: BLOOM’S: Comprehension

3. Concerning the price elasticities of supply and demand for commodities, empirical estimates suggest that most commodities have:
a. Inelastic supply schedules and inelastic demand schedules
b. Inelastic supply schedules and elastic demand schedules
c. Elastic supply schedules and inelastic demand schedules
d. Elastic supply schedules and elastic demand schedules
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Trade Problems of the Developing Nations
KEYWORDS: BLOOM’S: Comprehension

4. If the demand schedule for bauxite is relatively inelastic to price changes, an increase in the supply schedule of bauxite will cause a:
a. Decrease in price and a decrease in sales revenue
b. Decrease in price and an increase in sales revenue
c. Increase in price and a decrease in sales revenue
d. Increase in price and an increase in sales revenue
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Trade Problems of the Developing Nations
KEYWORDS: BLOOM’S: Comprehension

5. A primary goal of international commodity agreements has been the:
a. Maximization of members’ revenues via export taxes
b. Nationalization of corporations operating in member nations
c. Adoption of tariff protection against industrialized nation sellers
d. Moderation of commodity price fluctuations when markets are unstable
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Trade Problems of the Developing Nations
KEYWORDS: BLOOM’S: Comprehension

6. Which device has the International Tin Agreement utilized as a way of stabilizing tin prices?
a. Multilateral contracts
b. Export subsidies
c. Buffer stocks
d. Export tariffs
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Stabilizing Primary-Product Prices
KEYWORDS: BLOOM’S: Comprehension

7. Which method has not generally been used by the international commodity agreements to stabilize commodity prices?
a. Production quotas applied to the level of commodity output
b. Buffer stock arrangements among producing nations
c. Export restrictions applied to international sales of commodities
d. Measures to nationalize foreign-owned production operations
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: Stabilizing Primary-Product Prices
KEYWORDS: BLOOM’S: Comprehension

8. The OPEC nations during the 1970s manifested their market power by utilizing:
a. Export tariffs levied for revenue purposes
b. Export tariffs levied for protective purposes
c. Import tariffs levied for protective purposes
d. Import tariffs levied for revenue purposes
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: The OPEC Oil Cartel
KEYWORDS: BLOOM’S: Knowledge

9. One factor that has prevented the formation of cartels for producers of commodities is that:
a. The demand for commodities tends to be price inelastic
b. Substitute products exist for many commodities
c. Commodity produces have been able to dominate world markets
d. Production of most commodities is capital intensive
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis
STATE STANDARDS: United States – PA – DESC: International Trade and Fi – DESC: International Trade and Finance
TOPICS: The OPEC Oil Cartel
KEYWORDS: BLOOM’S: Comprehension