View a FREE sample

This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 2, The Tyranny of Controls.

Multiple Choice Questions

1. What interferes with the transmittal of information by prices?
(a) actions of manufacturers
(b) Governmental control of prices
(c) actions of sellers
(d) actions of buyers

2. International trade theory is based on:
(a) the principle of absolute advantage
(b) inflows and outflows
(c) the principle of comparative advantage
(d) geography

3. Free international trade results in better relations between individuals who differ in all but:
(a) attitudes
(b) interests
(c) nationalities
(d) beliefs

4. A market failure occurs when:
(a) an action or transaction affects third parties
(b) the production of a good is discontinued
(c) a producer finds there is no demand for his good
(d) a producer goes bankrupt

5. What kind of international trade is best?
(a) no trade
(b) free trade
(c) trade with restrictions
(d) partically free trade

Short Answer Questions

1. Economic freedom refers to all but which of the following:

2. Protection refers to:

3. The Principle of Comparative Advantage states that a nation should specialize in:

4. The only kind of capital:

5. Adam Smith says that voluntary exchange will not take place unless:

(see the answer key)

This section contains 252 words (approx. 1 page at 300 words per page) View a FREE sample