QUESTION 13

1. The Lorenz curve ________; the further away of the actual income distribution curve from the absolute equality curve, the ___the inequality.
2. a.shows the level of imports and exports in an economy; lowerb.shows the levels of income and wealth inequality in an economy; higherc.shows the difference between the supply and demand curves at all prices; higher

3 points

QUESTION 14

1. Which of the following doesNOTrepresent a market failure?
2. a.Negative externalities such as pollution.b.Insufficient production of public goods, such as highways and national defense.c.Bankruptcies exist in the economy.d.Imperfect competition such as monopolies.

3 points

QUESTION 15

1. Most favored nations (MFN) treatment basically means:
2. a.Granting first and most favorable treatment to a nation or nations that other nations do not generally get.
3. b.Extending to any trading partner with MFN status the same privileges and concessions that have been granted in negotiation to any other trade partner.
4. c.Granting specially privileges and concessions to a particular nation that are not enjoyed by any other nations.
5. d.Treating some countries with special privilege while discriminating against others.

3 points

QUESTION 16

1. Which of the following statement isNOTconsistent with our analysis of supply and demand? (Note: In each statement, we assume everything else is unchanged.)
2. a.If demand rises, the demand curve shifts to the right, equilibrium price and quantity will both increase.
3. b.If supply rises, the supply curve shifts to the right, equilibrium price and quantity will both increase.
4. c.If demand falls, the demand curve shifts to the left, equilibrium price and quantity will both decrease.
5. d.If supply falls, the supply curve shifts to the left, equilibrium price will increase andequilibriumquantity will decrease.

3 points

QUESTION 17

1. Based on the trade theories we have discussed in the course, which of the following statement isNOTtrue?
2. a.Trade is good for the exporting country and bad for the importing country as it causes job loss in the importing country.
3. b.Trade allows a trading nation to consume beyond its production capacity.
4. c.Trade causes expansion in the export sector and contraction in the import-competing sector.
5. d.Trade is mutually beneficial for all trading nations.