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CA Foundation Economics: related Business Economics practice — page 7

The practice bank below covers broader Business Economics topics; a dedicated Economics lesson is not available yet.

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Business Economics questions and exercises with answers

Showing questions 181–210 of 245.

Whose theorem says private bargaining can fix externalities?Read the answer and worked solution →Why does Coasean bargaining fail for a polluting steel factory?Read the answer and worked solution →What did Pigou recommend to curb over-production causing external harm?Read the answer and worked solution →In a progressive tax system, higher earners pay what?Read the answer and worked solution →The free rider problem assumes people are modelled as what?Read the answer and worked solution →What is international trade?Read the answer and worked solution →A product sold by a party in one country to a party in another is called what from the seller's side?Read the answer and worked solution →From the viewpoint of the country that receives a product bought from abroad, that product is called what?Read the answer and worked solution →In which part of the balance of payments are merchandise exports and imports of goods accounted for?Read the answer and worked solution →Which body works to facilitate trade between nations?Read the answer and worked solution →Cross-border trade compared with domestic trade is:Read the answer and worked solution →Across borders, capital and labour are:Read the answer and worked solution →Which of these is a service that is traded internationally?Read the answer and worked solution →Which principle shows even a more productive country gains from trade?Read the answer and worked solution →Under comparative advantage, a country should devote more resources to the activity with the lowest what?Read the answer and worked solution →Absolute advantage concerns which of the following?Read the answer and worked solution →Who developed the classical theory of comparative advantage in 1817?Read the answer and worked solution →Who first alluded to absolute advantage as the basis for international trade, in 1776?Read the answer and worked solution →Whose 1815 Essay on the External Corn Trade has an early use of comparative advantage?Read the answer and worked solution →In Ricardo's famous illustration, which two countries trade wine and cloth?Read the answer and worked solution →Portugal makes both goods with less labour than England, so it has:Read the answer and worked solution →In the Ricardian model, what mainly determines the pattern of trade?Read the answer and worked solution →What does the term terms of trade mean?Read the answer and worked solution →Under specialisation, mutually beneficial terms of trade lie between what?Read the answer and worked solution →X gives up 2 tea per rice, Y gives up 3 tea per rice. Who has the edge in rice?Read the answer and worked solution →Which economist reformulated comparative advantage in opportunity cost terms in 1930?Read the answer and worked solution →Haberler brought which curve into international trade theory?Read the answer and worked solution →Which model is a factor proportions model of comparative advantage?Read the answer and worked solution →The Heckscher–Ohlin model could not explain which kind of trade?Read the answer and worked solution →The doctrine of comparative advantage emerged as a response to debate over which British law of 1815?Read the answer and worked solution →

Worked practice questions

Whose theorem says private bargaining can fix externalities?

  1. Paul Samuelson
  2. John Keynes
  3. Arthur Pigou
  4. Ronald Coase
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Correct answer: D. Ronald Coase

Coase argued that an efficient outcome can sometimes be reached without government intervention.

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Why does Coasean bargaining fail for a polluting steel factory?

  1. Large transaction costs
  2. Costless bargaining
  3. Zero property rights
  4. Perfect information
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Correct answer: A. Large transaction costs

Many affected people cannot negotiate with the producer, and the large transaction costs block a private deal.

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What did Pigou recommend to curb over-production causing external harm?

  1. An import quota
  2. A subsidy for output
  3. A tax on the producer
  4. A guaranteed price
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Correct answer: C. A tax on the producer

Taxing the offending producer makes it pay for the harm and cuts the quantity produced.

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How to practise

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More Business Economics topics

Price-Output Determination under Different Market FormsPublic FinanceSupplyLaw of DemandInternational TradeBasic Problems of an Economy and Role of Price MechanismProduction And CostBusiness Cycles