C211 Global Economics Final Exam Latest
Update Questions with Correct Answers
Graded A+
Absolute advantage - Answer -being more efficient than anyone else in the production of any good
or service
Accounting profit - Answer -Total revenue - explicit costs
Accounting profit - Answer -Total revenue - explicit costs
Agglomeration - Answer -clustering of economic activities in one location
Agglomeration - Answer -Location specific advantages that arise from clustering of economic
activities in certain locations
AR - Answer -TR/Q
Arguments for restricting free trade - Answer -Decrease domestic jobs, national security, infant-
industry, unfair competition, protection-as-a-bargaining chip argument
ATC Curve - Answer -U shaped
Automatic stabilizers - Answer -changes in fiscal policy that stimulate aggregate demand when
economy goes into recession without policy makers having to take deliberate action (taxes, govt
spending)
Average fixed cost - Answer -TFC/Q
Average Revenue - Answer -(total revenue/total output) = price
Average total cost - Answer -TC/Q or TFC/Q+TVC/Q
Average variable cost - Answer -TVC/Q
Balance of payments - Answer -a country's international transaction statement which includes
merchandise trade, service trade, and capital movement
Barriers to entry - Answer -Ownership or control of essential resources, pricing or other strategic
barriers, legal barriers, economies of scale
Base of pyramid - Answer -GDP/GNI < $2000
Basic determinants of foreign exchange rate - Answer -relative price differences and purchasing
power parity, interest rates, productivity & balance of payments, exchange rate policies, investor
psychology
, Benefits of stronger dollar - Answer -consumer benefit from cheaper imports, keeps inflation low,
lower prices when traveling abroad, easier to acquire foreign targets
Benefits to home - Answer -Repatriated profits, increase exports to host, learning from FDI abroad
Benefits to host - Answer -capital inflow, technology spillover, demonstration effect, advanced mgt
knowhow, create jobs
BRIC - Answer -Brazil, Russia, India, China
Budget constraint - Answer -limit on consumption bundles that consumer can afford; shows trade
off between goods
Cartel - Answer -A group of firms acting in unison
Cartel - Answer -entity that engages in output and price-fixing
Civil law - Answer -Comprehensive statutes and codes as a primary means to form legal judgments
Classical theories of trade - Answer -merchantilism, absolute advantage, comparative advantage
Collusion - Answer -An agreement among firms in a market about quantities to produce or prices
to charge
Collusion - Answer -collective attempts between competing firms to reduce competition
Common law - Answer -English origin, shaped by precedents and traditions from previous judicial
decision
Comparative advantage - Answer -Domestic price < world price (export the good)
Comparative advantage - Answer -relative advantage in one economic activity that one nation
enjoys in comparison with other nations
Competitive firm demand curve - Answer -horizontal line
Competitive market - Answer -A market with many buyers and sellers trading identical products so
that each buyer and seller is a price taker
Complementary goods - Answer -An increase in the price of one product, decreases the demand
for another product (demand moves in opposite direction)
Consumer surplus - Answer -areas below demand curve and above price
Consumer surplus - Answer -benefit buyers receive from participating in a market; amount buyer
is willing to pay minutes amount buyer actually pays (area below demand curve and above price)
Contractionary fiscal policy - Answer -decrease govt spending or increase taxes
Cost to home - Answer -capital outflow, job loss
Update Questions with Correct Answers
Graded A+
Absolute advantage - Answer -being more efficient than anyone else in the production of any good
or service
Accounting profit - Answer -Total revenue - explicit costs
Accounting profit - Answer -Total revenue - explicit costs
Agglomeration - Answer -clustering of economic activities in one location
Agglomeration - Answer -Location specific advantages that arise from clustering of economic
activities in certain locations
AR - Answer -TR/Q
Arguments for restricting free trade - Answer -Decrease domestic jobs, national security, infant-
industry, unfair competition, protection-as-a-bargaining chip argument
ATC Curve - Answer -U shaped
Automatic stabilizers - Answer -changes in fiscal policy that stimulate aggregate demand when
economy goes into recession without policy makers having to take deliberate action (taxes, govt
spending)
Average fixed cost - Answer -TFC/Q
Average Revenue - Answer -(total revenue/total output) = price
Average total cost - Answer -TC/Q or TFC/Q+TVC/Q
Average variable cost - Answer -TVC/Q
Balance of payments - Answer -a country's international transaction statement which includes
merchandise trade, service trade, and capital movement
Barriers to entry - Answer -Ownership or control of essential resources, pricing or other strategic
barriers, legal barriers, economies of scale
Base of pyramid - Answer -GDP/GNI < $2000
Basic determinants of foreign exchange rate - Answer -relative price differences and purchasing
power parity, interest rates, productivity & balance of payments, exchange rate policies, investor
psychology
, Benefits of stronger dollar - Answer -consumer benefit from cheaper imports, keeps inflation low,
lower prices when traveling abroad, easier to acquire foreign targets
Benefits to home - Answer -Repatriated profits, increase exports to host, learning from FDI abroad
Benefits to host - Answer -capital inflow, technology spillover, demonstration effect, advanced mgt
knowhow, create jobs
BRIC - Answer -Brazil, Russia, India, China
Budget constraint - Answer -limit on consumption bundles that consumer can afford; shows trade
off between goods
Cartel - Answer -A group of firms acting in unison
Cartel - Answer -entity that engages in output and price-fixing
Civil law - Answer -Comprehensive statutes and codes as a primary means to form legal judgments
Classical theories of trade - Answer -merchantilism, absolute advantage, comparative advantage
Collusion - Answer -An agreement among firms in a market about quantities to produce or prices
to charge
Collusion - Answer -collective attempts between competing firms to reduce competition
Common law - Answer -English origin, shaped by precedents and traditions from previous judicial
decision
Comparative advantage - Answer -Domestic price < world price (export the good)
Comparative advantage - Answer -relative advantage in one economic activity that one nation
enjoys in comparison with other nations
Competitive firm demand curve - Answer -horizontal line
Competitive market - Answer -A market with many buyers and sellers trading identical products so
that each buyer and seller is a price taker
Complementary goods - Answer -An increase in the price of one product, decreases the demand
for another product (demand moves in opposite direction)
Consumer surplus - Answer -areas below demand curve and above price
Consumer surplus - Answer -benefit buyers receive from participating in a market; amount buyer
is willing to pay minutes amount buyer actually pays (area below demand curve and above price)
Contractionary fiscal policy - Answer -decrease govt spending or increase taxes
Cost to home - Answer -capital outflow, job loss
