Question 1

A limit on the quantity of a good that may be imported in a given time period is

Accepted Answer

An import quota is a limit on the quantity of a good that may be imported in a given time period. Tariffs are taxes on imported goods, comparative advantage is a concept related to international trade, and import allocation is not a commonly used term in trade policy.

Question 2

Which of the following statements is true concerning comparative advantage?

Accepted Answer

According to the theory of comparative advantage, countries specialize in producing goods in which they have a lower opportunity cost. Poor nations typically have a lower opportunity cost in agricultural goods due to their abundant labor force and favorable climate, while they may have a higher opportunity cost in high-tech goods due to their lack of advanced technology and skilled workers. Therefore, poor nations typically have a comparative advantage in agricultural goods, but not necessarily in high-tech goods.

Question 3

One World View article is titled "Glaring Inequalities." Of the countries listed,the least inequality in the distribution of income is likely to occur in

Accepted Answer

According to the article "Glaring Inequalities," Japan has the least inequality in the distribution of income of the countries listed. While the article acknowledges that inequality still exists in Japan, it notes that the country's strong welfare system and emphasis on a "collective society" have helped to reduce income disparities. The other countries listed (United States, Botswana, and South Africa) are all noted to have higher levels of income inequality.

Question 4

According to Hernando de Soto,poor countries should focus their development policies on all of the following except

Accepted Answer

Hernando de Soto argues that poor countries should focus on reducing bureaucratic barriers, encouraging private ownership, and improving infrastructure to facilitate business activity in order to spur economic development. However, increasing taxes on private companies would likely discourage entrepreneurship and investment, which could hinder economic growth.

Question 5

The ability of a country to produce a specific good at a lower opportunity cost than its trading partners is known as

Accepted Answer

Comparative advantage refers to the ability of a country to produce a certain good or service at a lower opportunity cost than another country. This means that even if a country has an absolute advantage in all goods, it can still benefit from trade by specializing in the product it can produce at a lower cost.

Question 6

A World View article,"The Female 'Inequality Trap,'" says that in many poor nations the "… returns on female human capital investment is low." When women are not allowed to work outside the home or to receive an education,this is referred to as

Accepted Answer

The article refers to the situation where women are not allowed to work or receive an education as the "inequality trap," which implies that women are being held back and prevented from achieving equality with men. This is not just a matter of productivity, prejudice, or justice, but a combination of all three factors contributing to a systemic and entrenched problem.

Question 7

One World View article is titled "Glaring Inequalities." Of the countries listed,the greatest inequality in the distribution of income is likely to occur in

Accepted Answer

Namibia has one of the highest levels of income inequality in the world, as measured by the Gini coefficient, which is a statistical measure of economic inequality in a population.

Question 8

Poor nations typically have a competitive advantage in agricultural goods because of

Accepted Answer

Poor nations typically have lower labor costs, which gives them a competitive advantage in agricultural goods because labor is a significant cost in the production of agricultural commodities. This advantage is often offset by a lack of productivity or technology, but low labor costs can still give poor nations an advantage over higher-cost producers in developed nations.

Question 9

In his book The Other Path,de Soto suggests that the key to economic development is

Accepted Answer

In his book, De Soto argues that entrepreneurship and market forces are the key to economic development. He suggests that the informal sector, which is made up of entrepreneurs and small businesses who operate outside of government regulations, offers the most promising path towards sustainable development. By removing barriers to the formalization of this sector and fostering a culture of entrepreneurship, De Soto believes that governments can tap into its potential and unleash economic growth.

Question 10

According to Bill Gates,from the World View article titled "The Way We Give: Philanthropy Can Step In Where Market Forces Don't," more than 90 percent of the money devoted to health research is spent on those who

Accepted Answer

Bill Gates points out that the majority of health research funding is directed towards diseases that affect the wealthiest 10% of the world's population, rather than conditions like malaria that predominantly impact those in developing countries. This highlights a disparity in global health research priorities.

Question 11

Which of the following does not contribute to a pro-business climate for investors?

Accepted Answer

High tax rates increase the financial burden on businesses and investors, making it less attractive to invest in a particular location or country. A pro-business climate typically involves low tax rates or tax incentives to stimulate investment and growth. Secure property rights, minimal government regulation, and legalized profit all contribute to a pro-business climate by providing a stable legal framework and incentives for businesses to operate and invest.

Question 12

In general,countries with well-defined property rights,less government regulation,and lower taxes have

Accepted Answer

The answer of In general,countries with well-defined property rights,less government...

Question 13

Which of the following is not part of Hernando de Soto's The Other Path?

Accepted Answer

Hernando de Soto's "The Other Path" focuses on integrating the informal economy into the formal economy, not encouraging the underground economy.

Question 14

Which of the following does not contribute to an institutional structure that promotes economic growth?

Accepted Answer

Policy uncertainty can create doubts and hesitation among investors and entrepreneurs, which can lead to reduced investment and growth. The other options, such as a pro-business environment, well-defined property rights, and entrepreneurial incentives, create a favorable institutional structure that promotes economic growth.

Question 15

Which of the following contributes to an institutional structure that promotes economic growth?

Accepted Answer

Property rights are necessary for economic growth as they provide individuals and businesses with the security to invest in their property, innovate, and trade without fear of unlawful seizure or confiscation. This promotes efficient resource allocation and economic activity, enabling economic growth. Comparative advantage, technology, and the inequality trap may also play a role in economic growth but are not as fundamental to promoting it as property rights.

Question 16

According to the World View article titled "The Way We Give: Philanthropy Can Step In Where Market Forces Don't," in which of the following ways does philanthropy not improve the market outcome?

Accepted Answer

Philanthropy can provide resources and incentives for firms to invest in research and development for new and improved health care solutions, thus improving the market outcome. Therefore, philanthropy does not fail to improve the market outcome in this way.

Question 17

A World View article,"Glaring Inequalities," says that income inequality tends to diminish as a nation develops.The distribution of income answers the ________ question.

Accepted Answer

The distribution of income answers the question "for whom" because it indicates how income is divided among different individuals or groups within a society. In other words, it shows who benefits the most and who benefits the least from a society's economic resources. The other answer options, "how much," "where," and "why," do not directly address the issue of income distribution.

Question 18

Women in poor countries are more likely to experience all of the following except

Accepted Answer

Dowries are typically brought by the bride's family to the groom's in some cultures, not prohibited. The other options (A, B, C) are common issues faced by women in poor countries.

Question 19

De Soto's The Other Path encourages poor countries to use their development policies to do all of the following except

Accepted Answer

De Soto's The Other Path emphasizes the importance of reducing regulations, enforcing property laws, and encouraging entrepreneurship for economic growth. However, it does not encourage population growth as a development policy. Therefore, the correct answer is A.

Question 20

Import quotas have a negative impact on poor nations because they make it difficult for poor nations to

Accepted Answer

Import quotas limit the amount of goods that can be imported into a country, so it becomes difficult for poor nations to sell their agricultural goods to richer nations. This, in turn, deprives poor nations of valuable foreign exchange earnings, making it harder for them to develop economically. Additionally, import quotas artificially inflate the price of goods, making it more difficult for poor nations to access the goods they need.

Quiz 37: Global Poverty