, TESTBANK FOR International Economics, 14th Edition Salvatore
Important Notes
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A sample of selected pages has been provided for preview.
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provided.
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New editions are added regularly – stay connected for updates!
⚠️Note on Answer Keys: If the answer key is not included within the chapter
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,International Economics – 143th Edition Test Bank
CHAPTER 1
*(Core Chapter)
INTRODUCTION
¶
¶
Multiple-Choice Questions
1. Which of the following products are not produced at all in the United States?
*a. Coffee, tea, cocoa
b. steel, copper, aluminum
c. petroleum, coal, natural gas
d. typewriters, computers, airplanes
2. International trade is most important to the standard of living of:
a. the United States
*b. Switzerland
c. Germany
d. England
3. Over time, the economic interdependence of nations has:
*a. grown
b. diminished
c. remained unchanged
d. cannot say
4. A rough measure of the degree of economic interdependence of a nation is given by:
a. the size of the nations' population
b. the percentage of its population to its GDP
*c. the percentage of a nation's imports and exports to its GDP
d. all of the above
5. Economic interdependence is greater for:
*a. small nations
b. large nations
c. developed nations
d. developing nations
(TB Chh0 1_Salvatore_14e) 1-1 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
6. The gravity model of international trade predicts that trade between two nations is
larger
a. the larger the two nations
b. the closer the nations
c. the more open are the two nations
*d. all of the above
7. International economics deals with:
a. the flow of goods, services, and payments among nations
b. policies directed at regulating the flow of goods, services, and payments
c. the effects of policies on the welfare of the nation
*d. all of the above
8. International trade theory refers to:
*a. the microeconomic aspects of international trade
b. the macroeconomic aspects of international trade
c. open economy macroeconomics or international finance
d. all of the above
9. Which of the following is not the subject matter of international finance?
a. foreign exchange markets
b. the balance of payments
*c. the basis and the gains from trade
d. policies to adjust balance of payments disequilibria
10. Economic theory:
a. seeks to explain economic events
b. seeks to predict economic events
c. abstracts from the many detail that surrounds an economic event
*d. all of the above
11. Which of the following is not an assumption generally made in the study of
international economics?
a. two nations
b. two commodities
*c. perfect international mobility of factors
d. two factors of production
(TB Chh0 1_Salvatore_14e) 1-2 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
12. In the study of international economics:
a. international trade policies are examined before the bases for trade
b. adjustment policies are discussed before the balance of payments
c. the case of many nations is discussed before the two-nations case
*d. none of the above
¶
¶
¶
13. International trade is similar to interregional trade in that both must overcome:
*a. distance and space
b. trade restrictions
c. differences in currencies
d. differences in monetary systems
14. The opening or expansion of international trade usually affects all members of
society:
a. positively
b. negatively
*c. most positively but some negatively
d. most negatively but some positively
15. An increase in the dollar price of a foreign currency usually:
a. benefit U.S. importers
*b. benefits U.S. exporters
c. benefit both U.S. importers and U.S. exporters
d. harms both U.S. importers and U.S. exporters
16. Which of the following statements with regard to international economics is true?
a. It is a relatively new field
*b. it is a relatively old field
c. most of its contributors were not economists
d. none of the above
(TB Chh0 1_Salvatore_14e) 1-3 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
CHAPTER 2
*(Core Chapter)
THE LAW OF COMPARATIVE ADVANTAGE
Multiple-Choice Questions
1. The Mercantilists did not advocate:
*a.free trade
b. stimulating the nation's exports
c. restricting the nations' imports
d. the accumulation of gold by the nation
2. According to Adam Smith, international trade was based on:
*a. absolute advantage
b. comparative advantage
c. both absolute and comparative advantage
d. neither absolute nor comparative advantage
3. What proportion of international trade is based on absolute advantage?
a. All
b. most
*c. some
d. none
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-1 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
4. The commodity in which the nation has the smallest absolute disadvantage is the
commodity of its:
a. absolute disadvantage
b. absolute advantage
c. comparative disadvantage
*d. comparative advantage
5. If in a two-nation (A and B), two-commodity (X and Y) world, it is established that
nation A has a comparative advantage in commodity X, then nation B must have:
a. an absolute advantage in commodity Y
b. an absolute disadvantage in commodity Y
c. a comparative disadvantage in commodity Y
*d. a comparative advantage in commodity Y
6. If with one hour of labor time nation A can produce either 3X or 3Y while nation B
can produce either 1X or 3Y (and labor is the only input):
a. nation A has a comparative disadvantage in commodity X
b. nation B has a comparative disadvantage in commodity Y
*c. nation A has a comparative advantage in commodity X
d. nation A has a comparative advantage in neither commodity
7. With reference to the statement in Question 6:
a Px/Py=1 in nation A
b. Px/Py=3 in nation B
c. Py/Px=1/3 in nation B
*d. all of the above
8. With reference to the statement in Question 6, if 3X is exchanged for 3Y:
a. nation A gains 2X
*b. nation B gains 6Y
c. nation A gains 3Y
d. nation B gains 3Y
9. With reference to the statement of Question 6, the range of mutually beneficial trade
between nation A and B is:
a 3Y < 3X < 5Y
b. 5Y < 3X < 9Y
*c 3Y < 3X < 9Y
d. 1Y < 3X < 3Y
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-2 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
10. If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B:
a. there will be no trade between the two nations
b. the relative price of X is the same in both nations
c. the relative price of Y is the same in both nations
*d. all of the above
11. Ricardo explained the law of comparative advantage on the basis of:
*a. the labor theory of value
b. the opportunity cost theory
c. the law of diminishing returns
d. all of the above
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-3 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
12. Which of the following statements is true?
a. The combined demand for each commodity by the two nations is negatively sloped
b. the combined supply for each commodity by the two nations is rising stepwise
c. the equilibrium relative commodity price for each commodity with trade is given
by the intersectionthe intersection of the demand and supply of each commodity by the
two nations
*d. all of the above
13. A difference in relative commodity prices between two nations can be based upon a
difference in:
a. factor endowments
b. technology
c. tastes
*d. all of the above
14. In the trade between a small and a large nation:
a. the large nation is likely to receive all of the gains from trade
*b. the small nation is likely to receive all of the gains from trade
c. the gains from trade are likely to be equally shared
d. we cannot say
15. The Ricardian trade model has been empirically
*a. verified
b. rejected
c. not tested
d. tested but the results were inconclusive
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-4 Dominick Salvatore and Ralf Hepp
, International Economics – 14th Edition Test Bank
*CHAPTER 3
(Core Chapter)
THE STANDARD THEORY OF INTERNATIONAL TRADE
¶
Multiple-Choice Questions
¶
1. A production frontier that is concave from the origin indicates that the nation incurs
increasing opportunity costs in the production of:
a. commodity X only
b. commodity Y only
*c. both commodities
d. neither commodity
2. The marginal rate of transformation (MRT) of X for Y refers to:
a. the amount of Y that a nation must give up to produce each additional unit of X
b. the opportunity cost of X
c. the absolute slope of the production frontier at the point of production
*d. all of the above
3. Which of the following is not a reason for increasing opportunity costs:
*a. technology differs among nations
b. factors of production are not homogeneous
c. factors of production are not used in the same fixed proportion in the production of all
commodities
d. for the nation to produce more of a commodity, it must use resources that are less and less
suited in the production of the commodity
4. Community indifference curves:
a. are negatively sloped
b. are convex to the origin
c. should not cross
*d. all of the above
(TB_Ch03_Salvatore 14e.docx) (TB Ch 3) 3-1 Dominick Salvatore and Ralf Hepp
Important Notes
The file organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
⚠️Note on Answer Keys: If the answer key is not included within the chapter
questions, you will find the complete answers and solutions at the end of each
chapter.
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
,International Economics – 143th Edition Test Bank
CHAPTER 1
*(Core Chapter)
INTRODUCTION
¶
¶
Multiple-Choice Questions
1. Which of the following products are not produced at all in the United States?
*a. Coffee, tea, cocoa
b. steel, copper, aluminum
c. petroleum, coal, natural gas
d. typewriters, computers, airplanes
2. International trade is most important to the standard of living of:
a. the United States
*b. Switzerland
c. Germany
d. England
3. Over time, the economic interdependence of nations has:
*a. grown
b. diminished
c. remained unchanged
d. cannot say
4. A rough measure of the degree of economic interdependence of a nation is given by:
a. the size of the nations' population
b. the percentage of its population to its GDP
*c. the percentage of a nation's imports and exports to its GDP
d. all of the above
5. Economic interdependence is greater for:
*a. small nations
b. large nations
c. developed nations
d. developing nations
(TB Chh0 1_Salvatore_14e) 1-1 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
6. The gravity model of international trade predicts that trade between two nations is
larger
a. the larger the two nations
b. the closer the nations
c. the more open are the two nations
*d. all of the above
7. International economics deals with:
a. the flow of goods, services, and payments among nations
b. policies directed at regulating the flow of goods, services, and payments
c. the effects of policies on the welfare of the nation
*d. all of the above
8. International trade theory refers to:
*a. the microeconomic aspects of international trade
b. the macroeconomic aspects of international trade
c. open economy macroeconomics or international finance
d. all of the above
9. Which of the following is not the subject matter of international finance?
a. foreign exchange markets
b. the balance of payments
*c. the basis and the gains from trade
d. policies to adjust balance of payments disequilibria
10. Economic theory:
a. seeks to explain economic events
b. seeks to predict economic events
c. abstracts from the many detail that surrounds an economic event
*d. all of the above
11. Which of the following is not an assumption generally made in the study of
international economics?
a. two nations
b. two commodities
*c. perfect international mobility of factors
d. two factors of production
(TB Chh0 1_Salvatore_14e) 1-2 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
12. In the study of international economics:
a. international trade policies are examined before the bases for trade
b. adjustment policies are discussed before the balance of payments
c. the case of many nations is discussed before the two-nations case
*d. none of the above
¶
¶
¶
13. International trade is similar to interregional trade in that both must overcome:
*a. distance and space
b. trade restrictions
c. differences in currencies
d. differences in monetary systems
14. The opening or expansion of international trade usually affects all members of
society:
a. positively
b. negatively
*c. most positively but some negatively
d. most negatively but some positively
15. An increase in the dollar price of a foreign currency usually:
a. benefit U.S. importers
*b. benefits U.S. exporters
c. benefit both U.S. importers and U.S. exporters
d. harms both U.S. importers and U.S. exporters
16. Which of the following statements with regard to international economics is true?
a. It is a relatively new field
*b. it is a relatively old field
c. most of its contributors were not economists
d. none of the above
(TB Chh0 1_Salvatore_14e) 1-3 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
CHAPTER 2
*(Core Chapter)
THE LAW OF COMPARATIVE ADVANTAGE
Multiple-Choice Questions
1. The Mercantilists did not advocate:
*a.free trade
b. stimulating the nation's exports
c. restricting the nations' imports
d. the accumulation of gold by the nation
2. According to Adam Smith, international trade was based on:
*a. absolute advantage
b. comparative advantage
c. both absolute and comparative advantage
d. neither absolute nor comparative advantage
3. What proportion of international trade is based on absolute advantage?
a. All
b. most
*c. some
d. none
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-1 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
4. The commodity in which the nation has the smallest absolute disadvantage is the
commodity of its:
a. absolute disadvantage
b. absolute advantage
c. comparative disadvantage
*d. comparative advantage
5. If in a two-nation (A and B), two-commodity (X and Y) world, it is established that
nation A has a comparative advantage in commodity X, then nation B must have:
a. an absolute advantage in commodity Y
b. an absolute disadvantage in commodity Y
c. a comparative disadvantage in commodity Y
*d. a comparative advantage in commodity Y
6. If with one hour of labor time nation A can produce either 3X or 3Y while nation B
can produce either 1X or 3Y (and labor is the only input):
a. nation A has a comparative disadvantage in commodity X
b. nation B has a comparative disadvantage in commodity Y
*c. nation A has a comparative advantage in commodity X
d. nation A has a comparative advantage in neither commodity
7. With reference to the statement in Question 6:
a Px/Py=1 in nation A
b. Px/Py=3 in nation B
c. Py/Px=1/3 in nation B
*d. all of the above
8. With reference to the statement in Question 6, if 3X is exchanged for 3Y:
a. nation A gains 2X
*b. nation B gains 6Y
c. nation A gains 3Y
d. nation B gains 3Y
9. With reference to the statement of Question 6, the range of mutually beneficial trade
between nation A and B is:
a 3Y < 3X < 5Y
b. 5Y < 3X < 9Y
*c 3Y < 3X < 9Y
d. 1Y < 3X < 3Y
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-2 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
10. If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B:
a. there will be no trade between the two nations
b. the relative price of X is the same in both nations
c. the relative price of Y is the same in both nations
*d. all of the above
11. Ricardo explained the law of comparative advantage on the basis of:
*a. the labor theory of value
b. the opportunity cost theory
c. the law of diminishing returns
d. all of the above
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-3 Dominick Salvatore and Ralf Hepp
,International Economics – 143th Edition Test Bank
12. Which of the following statements is true?
a. The combined demand for each commodity by the two nations is negatively sloped
b. the combined supply for each commodity by the two nations is rising stepwise
c. the equilibrium relative commodity price for each commodity with trade is given
by the intersectionthe intersection of the demand and supply of each commodity by the
two nations
*d. all of the above
13. A difference in relative commodity prices between two nations can be based upon a
difference in:
a. factor endowments
b. technology
c. tastes
*d. all of the above
14. In the trade between a small and a large nation:
a. the large nation is likely to receive all of the gains from trade
*b. the small nation is likely to receive all of the gains from trade
c. the gains from trade are likely to be equally shared
d. we cannot say
15. The Ricardian trade model has been empirically
*a. verified
b. rejected
c. not tested
d. tested but the results were inconclusive
((TB_Ch02_Salvatore 14e.docxch02.doc) 2-4 Dominick Salvatore and Ralf Hepp
, International Economics – 14th Edition Test Bank
*CHAPTER 3
(Core Chapter)
THE STANDARD THEORY OF INTERNATIONAL TRADE
¶
Multiple-Choice Questions
¶
1. A production frontier that is concave from the origin indicates that the nation incurs
increasing opportunity costs in the production of:
a. commodity X only
b. commodity Y only
*c. both commodities
d. neither commodity
2. The marginal rate of transformation (MRT) of X for Y refers to:
a. the amount of Y that a nation must give up to produce each additional unit of X
b. the opportunity cost of X
c. the absolute slope of the production frontier at the point of production
*d. all of the above
3. Which of the following is not a reason for increasing opportunity costs:
*a. technology differs among nations
b. factors of production are not homogeneous
c. factors of production are not used in the same fixed proportion in the production of all
commodities
d. for the nation to produce more of a commodity, it must use resources that are less and less
suited in the production of the commodity
4. Community indifference curves:
a. are negatively sloped
b. are convex to the origin
c. should not cross
*d. all of the above
(TB_Ch03_Salvatore 14e.docx) (TB Ch 3) 3-1 Dominick Salvatore and Ralf Hepp
