ECO 305 Week 5 Quiz – Strayer
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Week 5 Quiz 4 Chapter 7
CHAPTER 7
TRADE POLICIES FOR THE DEVELOPING
NATIONS
MULTIPLE CHOICE
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
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
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
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
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
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
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
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
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
10. Which
device has been used by the International Wheat Agreement to stipulate the
minimum prices at which importers will buy stipulated quantities from producers
and the maximum prices at which producers will sell stipulated quantities to
importers?
a. Buffer stocks
b. Export controls
c. Multilateral contracts
d. Production controls
11. If
the bauxite exporting countries form a cartel to boost the price of bauxite so
as to increase sales revenue, they believe that the demand for bauxite:
a. Is inelastic with respect to price
changes
b. Is elastic with respect to price
changes
c. Will increase in response to a price
increase
d. Will not change in response to a price
change
12. If
the supply schedule for tin is relatively inelastic to price changes, a
decrease in the demand schedule for tin will cause a:
a. Decrease in price and an increase in
sales revenue
b. Decrease in price and a decrease in
sales revenue
c. Increase in price and an increase in
sales revenue
d. Increase in price and a decrease in
sales revenue
13. Which
of the following could partially explain why the terms of trade of developing
countries might deteriorate over time?
a. Developing-country exports mainly
consist of manufactured goods
b. Developing-country imports mainly
consist of primary products
c. Commodity export prices are determined
in highly competitive markets
d. Commodity export prices are solely
determined by developing countries
14. Which
terms-of-trade concept emphasizes a nation's capacity to import?
a. Income terms of trade
b. Commodity terms of trade
c. Barter terms of trade
d. Price terms of trade
15. Which
trade strategy have developing countries used to restrict imports of
manufactured goods so that the domestic market is preserved for home producers,
who thus can take over markets already established in the country?
a. International commodity agreement
b. Export promotion
c. Multilateral contract
d. Import substitution
16. Which
trade strategy have developing countries used to replace commodity exports with
exports such as processed primary products, semi-manufacturers, and
manufacturers?
a. Multilateral contract
b. Buffer stock
c. Export promotion
d. Export quota
17. To
help developing countries expand their industrial base, some industrial
countries have reduced tariffs on designated manufactured imports from
developing countries below the levels applied to imports from industrial countries.
This scheme is referred to as:
a. Generalized system of preferences
b. Export-led growth
c. International commodity agreement
d. Reciprocal trade agreement
18. Which
nation accounts for the largest amount of OPEC's oil reserves and production?
a. Iran
b. Libya
c. Iraq
d. Saudi Arabia
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