Question

1. Which of the following statements is true if the PPF has a concave shape (bowed out from the origin)? A. Resources can be perfectly substituted between the production of both of the goods, B. As more of one good is produced, more and more of the other good must be given up, C. Consumers want both products equally, D. The opportunity costs of both products are equal, E. It is possible to produce additional quantities of both products

2. Jump High Corporation argues that they need a tariff on tennis shoes made in England since the government provides subsidies to tennis shoemakers in the nation. This is an argument for... A. an infant industry, B. job protection, C. national security, D. environmental standards, E. protection from dumping

3. Suppose interest rates rise in the United States, but they don't rise in other nations. As a result of this change, which of the following is true? I. The demand for the U.S. dollar will increase, II. The demand for the U.S. dollar will decrease, III. U.S. exports will decrease as a result of the changing value of the U.S. dollar, IV. U.S. exports will increase as a result of the changing of the U.S. dollar. A. I only, B. I and IV only, C. I and III only, D. II and IV only, E. II and III only

Answer 1

a) "B"

A concave PPF means a rising opportunity cost curve. As more of one good is produced, more and more of the other good must be given up, the answer is "B".

b) "E"

As the other exporter is selling at a price lower than the market cost it will lead to dumping and tariffs will be needed to level the market. Its anti dumping.

c) "C"

IT will lead to an increase in the demand for dollar and that will appreciate it. thereby decreasing the exports in the world market. Statement 1 and 3 are correct.