TEST BANKS for International Political Economy 7th Edition by Thomas Oatley. ISBN 9781000771695

CHAPTER 3: The Political Economy of International Trade Cooperation Multiple Choice Questions 1. The concept of production possibility frontiers (PPF) means that a) the factors of production are limited by a country’s geographical frontiers. b) any decision to use factors of production to produce one good necessarily means that these factors are not available to produce other goods. c) any decision to use factors of production to produce one good doesn’t necessarily mean that these factors are not available to produce other goods. d) the factors of production are unlimited by a country’s geographical frontiers. e) countries are endowed with factors of production in infinite amounts.

Answer: b 2. Production possibility frontiers (PPF) can be represented graphically by lines that a) are called the marginal rates of transformation. b) are called the rates of marginal production. c) are called the rates of frontier possibilities. d) are called the rates of production transformation. e) are called the marginal transformation of frontiers.

Answer: a 3. Because an autarkic country cannot consume more than it produces, the PPF also defines a) the limits of possible exports. b) the limits of possible imports. c) the limits of possible trade. d) the limits of possible investment. e) the limits of possible consumption.

Answer: e 4. Consumption indifference curves help us understand a) the specific combination of products consumers will purchase. b) the total amount of products consumers will purchase. c) the general combination of products consumers will not purchase. d) the general combination of products consumers will be indifferent to. e) the specific combination of products countries will not produce.

Answer: a 5. The marginal rate of substitution is a consumption indifference curve that