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

Multiple Choice Questions

1. The higher price of pencils results in all but the following:
(a) the firing of more workers to produce pencils
(b) fewer pencils
(c) better worker condiciton for pencil prolduction workers
(d) higher wages for pencil production workers

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

3. Prices function to transmit information to all but:
(a) no one in particular
(b) manufacturerr
(c) buyers
(d) sellers

4. The infant industry argument for protection says a:
(a) only certain industries should receive protection
(b) new industry should be given protection until it matures and can compete on its own
(c) all new industries should be given protection
(d) no industries should receive protection

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

Short Answer Questions

1. The only kind of capital:

2. Protection refers to:

3. An exchange rate is the:

4. What is a good source of information on prices and markets?

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

(see the answer key)

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