POS 486 - FINAL EXAM. QUESTIONS WITH ANSWERS. COMPLETE SOLUTIONS (A+ GRADE).

POS 486 - FINAL EXAM. QUESTIONS WITH ANSWERS. COMPLETE SOLUTIONS (A+ GRADE). Question 1 Free trade alters supply and demand by Selected Answer: 4. providing gains in the form of increased revenue to domestic producers Correct Answer: 2. lowering the price, thereby increasing the quantity demanded Response Feedback: See Chapter 3, "The Economic Case for Free Trade" and Lecture 3  Question 2 In a liberalized country with an abundance of labor and land but little capital, we would expect Selected Answer: 2. agricultural interests to be exportoriented Correct Answer: 2. agricultural interests to be exportoriented Response Feedback: See Oatley Chapter 4 & Lecture 4 on abundant factors & trade preferences & the midterm exam.  Question 3 When U.S. automakers (the Big 3) sought a bailout from the federal government in 2008, the sectoral model would predict Selected Answer: 2. that the automakers and autoworkers would both support the bailout Correct Answer: 2. that the automakers and autoworkers would both support the bailout Response Feedback: Refer to the differences between the sector and factor models, Chapter 4  Question 4 In a factor-based model of trade, if a developing country begins producing more shoes and fewer aviation systems, who benefits? Selected Answer: 1 . labo r Correct Answer: 1