Final Exam AGEC 5343 International Ag Markets and Trade Dr. Shida Henneberry December 2009

Transcription

1 Final Exam AGEC 5343 International Ag Markets and Trade Dr. Shida Henneberry December 2009 Graph A is a graph of the effective rate of protection for wheat. Questions 1-5 refer to Graph A. 1.) A shift from S1 to S2 in Graph A could be caused by which of the following: a. An import tax on tractors Page 1 of 16

2 b. An import subsidy on fertilizer* c. An import tax on wheat d. A change in consumer preferences 2.) A shift from P1 to P2 in Graph A would most likely be caused by which of the following: a. An import tax on tractors b. An import subsidy on fertilizer c. An import tax on wheat* d. A change in consumer preferences 3.) The government revenue as a result of the policies in Graph A would most likely be a. Positive b. Negative c. Zero d. Unknown from looking at the graph* 4.) In graph A, local (domestic) Consumers (wheat buyers) will as a result of the policy a. Gain b. Lose* c. Be indifferent 5.) In graph A, local (domestic) Producers will as a result of the policy a. Gain* b. Lose c. Be indifferent Comparative Advantage Questions 6-25 and Graph B Page 2 of 16

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4 6.) In Graph B, point J represents a. The equilibrium quantity consumed before trade* b. The equilibrium quantity consumed after trade c. The exports after trade d. The imports after trade 7.) In Graph B, point H represents a. The equilibrium quantity consumed before trade b. The equilibrium quantity consumed after trade* c. The exports after trade d. The imports after trade 8.) In Graph B, if Pw is the price of wheat and Pb is the price of beef, the beef price before trade is a. 4Pw b. 1/4Pw* c. 1Pw d. 2Pw 9.) After trade, if Pw is the price of wheat and Pb is the price of beef, the price of beef in Graph B is a. 4Pw b. 1/4Pw c. 1Pw* d. 2Pw 10.) The Production Possibilities Frontier before trade in Graph B is a. Curve A b. Curve C c. Line B-D* d. Line B-E 11.) The Consumption Possibilities Frontier before trade in Graph B is a. Curve A b. Curve C c. Line B-D* d. Line B-E 12.) The Consumption Possibilities Frontier after trade in Graph B is a. Curve A b. Curve C c. Line B-D d. Line B-E* 13.) The consumer s welfare after trade in Graph B is a. Curve A b. Curve C* c. Line B-D d. Line B-E Page 4 of 16

5 14.) Assuming that the world (after-trade) price of wheat to beef (Pw/Pb) is equal to one, the country in Graph B has a comparative advantage in a. Beef* b. Wheat c. Pork 15.) The country in Graph B will import: a. 10 units of beef b. 10 units of wheat* c. 30 units of beef d. 30 units of wheat 16.) The country in Graph B will export a. 10 units of beef* b. 10 units of wheat c. 30 units of beef d. 30 units of wheat 17.) The consumer s welfare before trade in Graph B is a. Curve A* b. Curve C c. Line B-D d. Line B-E 18.) The country in Graph B will produce beef after trade (as compared to before trade). a. Less b. The same amount of c. More* d. No 19.) The country in Graph B will produce wheat after trade (as compared to before trade). a. Less* b. The same amount of c. More 20.) Society (as shown by their social welfare curve) will be after a country begins trade a. Worse off b. Indifferent c. Better off* 21.) Which of the following is NOT an assumption of the Hecksher-Ohlin Theory: a. Labor and Capital flow is restricted between industries* b. The production of various commodities use intensively different factors of production c. The amount of labor and capital in the two countries differ d. Tastes are the same across countries Page 5 of 16

6 22.) According to the H-O Theory, each country will the commodity that uses intensively the factor of production that it is abundant in and will the other commodity. a. Export, not use b. Import, export c. Import, import d. Export, Import* 23.) According to the H-O theory, the U.S., which is abundant in farmland will likely export a. Wheat b. Corn c. Textiles d. Both A and B* 24.) Assuming that the textile industry uses unskilled workers-- According to the H-O theory, a country whose labor force is highly skilled will be most likely to import a. Computers b. Televisions c. Textiles* d. All of the above 25.) Assuming that the textile industry uses unskilled workers-- If a country is abundant in unskilled labor would produce for export. a. Computers b. Televisions c. Textiles* d. All of the above Questions are related to Graph C. Page 6 of 16

7 26.) Noting the direction of the arrow, Graph C represents a. An import tariff by a large country b. An import subsidy by a small country* c. An import tariff by a small country d. An import subsidy by a large country 27.) The importing country s policy in Graph C will have what net welfare effect on exporting countries? a. Net Gain b. Net Loss c. No Change* d. All of the above 28.) The world price in Graph C is a. P 1 b. P 2* c. P 3 d. The world price is not shown in this graph 29.) In graph C, the quantity produced by domestic producers after government intervention is a. Q 1 b. Q 2 * c. Q 3 Page 7 of 16

8 d. Q 4 30.) In graph C, the quantity demanded before government intervention is a. Q 1 b. Q 2 c. Q 3 * d. Q 4 Questions are related to Graph D. 31.) In Graph D, if P 2 is the equilibrium price before government intervention, P 1 is a. The world price prior to government intervention b. The self sufficiency price c. The domestic price after government intervention d. The world price after government intervention* 32.) What type of policy does Graph D represent? a. Import quota by a large country b. Import subsidy by a large country* c. Import quota by a small country d. Import subsidy by a small country 33.) In Graph D, the change in producer surplus is a. a b h b. a b * c. a + b d. h 34.) What effect will the policy in Graph D have on consumers in the domestic market? Page 8 of 16

9 a. No effect b. Can t determine the effect with the given information c. Consumers will have a net gain in welfare* d. Consumers will have a net loss in welfare 35.) What effect will the policy in Graph D have on producers in the world market? a. No effect b. Producers will have a net gain in welfare* c. Producers will have a net loss in welfare d. Can t determine the effect with the given information Graph E Questions ) The difference between the supply curve S1 and S2 in Graph E is the amount of a. The domestic consumption b. The quantity of the export quota c. The tax on imports d. The quantity of the import quota* Page 9 of 16

10 37.) Graph E most likely represents a. A large importing country b. A small exporting country c. A small importing country* 38.) The policy in Graph E will cause a producer surplus change of a. m* b. n c. o d. none of the above 39.) According to the policy in Graph E, there will be a. A government loss of (m + n + o + p) b. A consumer gain of (m + n + o + p) c. A government revenue of (n)* d. A producer loss of (o) 40.) The difference between Q 1 and Q 2 in Graph E is a. The import quota* b. The difference between the imports before the policy and imports after the policy c. The amount exported d. Both b and c Graph F- Questions Page 10 of 16

11 41.) The export quota in Graph F is a. Q1 to Q2 b. Q1 to Q3* c. Q2 to Q5 d. Q2 to Q3 42.) The policy in Graph F will cause the world price to a. Increase* b. Decrease c. Stay the same d. Become unstable 43.) The domestic price under free trade in Graph F is a. P1 b. P2* c. P3 d. P4 44.) The domestic price after the policy in Graph F is implemented is a. P1 b. P2 c. P3* d. P4 Page 11 of 16

12 45.) The domestic consumer surplus change after the policy in Graph F is a. f+g b. f+g+m+h+i c. f + g+m* d. f + g + h Graph G- Questions ) Graph G most likely represents which export policy a. Export quota by a large country b. Export quota by a small country c. Export tax by a small country d. Export subsidy by a small country* 47.) As a result of the policy in Graph G, exports will increase from a. Q2 to Q3 b. Q1 to Q4 c. Q1 to Q3 * 48.) As a result of the policy in Graph G, imports will increase from a. Q1 to Q2 Page 12 of 16

13 b. Q2 to Q3 c. This country does not import the commodity analyzed* 49.) The policy in Graph G will cause in consumer surplus in importing countries a. An increase b. A decrease c. No change* 50.) After the policy in Graph G is implemented, consumers in that country will consume a. Q1* b. Q2 c. Q3 d. Q4 Graph H Questions ) Graph H most likely represents which export policy a. Export subsidy by a large country* b. Export quota by a small country c. Export tax by a small country d. Export subsidy by a small country 52.) The change in producer surplus as a result of the policy in graph H is a. q+r+s+u+v+w Page 13 of 16

14 b. q+r+s+t c. q+r+s* d. u+v+w 53.) The policy in Graph H will cause the world price to a. Increase b. Decrease* c. Stay the same d. All of the above 54.) The country in Graph H will exports as a result of the policy a. Increase* b. Decrease c. Have zero 55.) The policy in Graph H will cause consumers across the world to a. Increase consumer surplus b. Consume more c. Decrease consumer surplus d. Both A and B* Graph I- Questions Page 14 of 16

15 56.) Graph I most likely represents a. Import quota by a large country b. Export subsidy by a small country c. Export quota by a small country* d. Export quota by a large country 57.) The most likely goal of the policy shown in Graph I is a. Increase foreign consumer surplus b. Increase producer surplus c. Help domestic consumers* d. Reduce world food prices 58.) The Quantity exported after the policy in Graph I is implemented will be a. Q4 Q1 b. Q2 Q1 c. Q3 Q2 d. Both B and C are correct* 59.) The government revenue as a result of the policy in Graph I is a. a+b b. b+c c. c+d d. Both B and C are correct* 60.) The net social welfare change is a. e b. b d c. b d e d. both A and C* Applied Topics in International Agricultural Trade and Development- Questions ) Increasing food prices caused problems for a. The wealthy b. The poor* c. U.S. corn producers d. Brazilian soybean producers 62.) Declining food prices since the 1950 s was caused primarily because of a. A decrease in trade barriers b. The industrial revolution c. An increase in trade barriers d. The green revolution* 63.) Among the reasons for a sudden increase in food prices in include a. The excess supply of food b. Increasing grain reserves c. Usage of grains for biofuels* Page 15 of 16

16 d. Both A and B 64.) Among the reasons for a recent decline in cereal crop prices include a. A decrease in ending stocks b. Falling crude oil prices* c. An increase in tractor sales d. A delay in planting because of a wet spring in the corn belt 65.) An increase in demand for meats causes a. An increase in demand for grains for feed b. An increase in meat prices c. An increase in grain prices d. All of the above* 66.) Many grain stocks have been reduced because a. Production has increased b. Consumption has increased faster than production c. Free trade has reduced the need for stocks d. Both B and C* 67.) Which two countries produce most of the world s ethanol a. Brazil and the U.S.* b. The U. S. and the E.U. c. Brazil and China d. China and Canada 68.) Which of the following places produces most of the world s biodiesel a. The U.S. b. Brazil c. The E.U.* d. China 69.) According to the National Geographic article on the Green Revolution, the poorest billion people in the world spend what percent of their income on food a b * c. Over 75 d. Under ) According to the National Geographic article, China s consumption of this meat increased by 45 percent from 1993 to 2005 a. Beef b. Chicken c. Fish d. Pork* Page 16 of 16