Question : 1.1 What Is International Economics About? 1) Historians of economic thought : 1303467

1.1 What Is International Economics About?

1) Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

A) “Of the Balance of Trade,” David Hume, 1776

B) “Wealth of Nations,” David Hume, 1758

C) “Wealth of Nations,” Adam Smith, 1758

D) “Wealth of Nations,” Adam Smith, 1776

E) “Of the Balance of Trade,” David Hume, 1758

2) From 1960 to 2012

A) the U.S. economy roughly tripled in size.

B) U.S. imports roughly tripled in size.

C) the share of US Trade in the global economy roughly tripled in size.

D) U.S. Imports roughly tripled as compared to U.S. exports.

E) U.S. exports roughly tripled in size.

3) The United States is less dependent on trade than most other countries because

A) the United States is a relatively large country with diverse resources.

B) the United States is a “Superpower.”

C) the military power of the United States makes it less dependent on anything.

D) the United States invests in many other countries.

E) many countries invest in the United States.

4) Theories of international economics from the 18th and 19th Centuries are

A) not relevant to current policy analysis.

B) only of moderate relevance in today’s modern international economy.

C) highly relevant in today’s modern international economy.

D) the only theories that actually relevant to modern international economy.

E) not well understood by modern mathematically oriented theorists.

5) An important insight of international trade theory is that when two countries engage in voluntary trade

A) one country always benefits at the expense of the other.

B) it is almost always beneficial to both countries.

C) it only benefits the low wage country.

D) it only benefits the high wage country.

E) it is almost never beneficial to both countries.

6) If there are large disparities in wage levels between countries, then

A) trade is likely to be harmful to both countries.

B) trade is likely to be harmful to the country with the high wages.

C) trade is likely to be harmful to the country with the low wages.

D) trade is likely to be harmful to neither country.

E) trade is likely to have no effect on either country.

7) The benefits of international trade are derived from trade in

A) tangible goods only.

B) intangible goods only.

C) goods but not services.

D) services but not goods.

E) anything of value.

8) Which of the following does NOT belong?

A) NAFTA

B) Uruguay Round

C) World Trade Organization

D) non-tariff barriers

E) major free trade agreements of the 1990s

9) International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.

A) does not, the level of complexity of international issues is unique

B) does not, the interactions associated with international economic relations is highly mathematical

C) does not, international economics takes a different perspective on economic issues

D) does not, international economic policy requires cooperation with other countries

E) does, the motives and behavior of individuals are the same in international

trade as they are in domestic transactions

10) Because the Constitution forbids restraints on interstate trade

A) the U.S. may not impose tariffs on imports from NAFTA countries.

B) the U.S. may not affect the international value of the $ U.S.

C) the U.S. may not put restraints on foreign investments in California if it involves a financial intermediary in New York State.

D) the U.S. may not impose export duties.

E) the U.S. may not disrupt commerce between Florida and Hawaii.

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July 1, 2023

P3-3: Income statement preparation On December 31, 2015, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she billed

$360,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $8,000, Ms. Chen paid annual salaries of $48,000 and $36,000 to the bookkeeper and the clerical assistant, respectively.

Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,600 for the year. Expenses for office supplies, including postage, totaled $10,400 for the year. In addition, Ms. Chen spent $17,000 during the year on tax-deductible travel and

entertainment associated with client visits and new business development. Lease payments for the office space rented (a taxdeductible expense) were $2,700 per month. Depreciation expense on the office furniture and fixtures was $15,600 for the year. During

the year, Ms. Chen paid interest of $15,000 on the $120,000 borrowed to start the business. She paid an average tax rate of 30% during 2015. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015. • b. Evaluate her 2015 financial performance.

P3-6: Balance sheet preparation Use the appropriate items from the following list to prepare in good form Mellark’s Baked Goods balance sheet at December 31, 2015.

P3-10: Statement of retained earnings Hayes Enterprises began 2015 with a retained

earnings balance of $928,000. During 2015, the firm earned $377,000 after taxes. From this amount, preferred stockholders were paid $47,000 in dividends. At year-end 2015, the firm’s retained earnings totaled $1,048,000. The firm had 140,000 shares of common

stock outstanding during 2015. a. Prepare a statement of retained earnings for the year ended December 31, 2015, for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash dividends paid in 2015.) b. Calculate the firm’s 2015 earnings

per share (EPS). c. How large a per-share cash dividend did the firm pay on common stock during 2015?

P3-16: Accounts receivable management An evaluation of the books of Blair Supply, which follows, gives the end-of-year accounts receivable balance, which

is believed to consist of amounts originating in the months indicated. The company had annual sales of $2.4 million. The firm extends 30-day credit terms. a. Use the year-end total to evaluate the firm’s collection system. b. If 70% of the firm’s sales occur

between July and December, would this information • affect the validity of your conclusion in part a? Explain. •

P3-18: Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 loan, to assess the firm’s financial leverage

and financial risk. On the basis of the debt ratios for Creek, along with the industry averages (see the top of the next page) and Creek’s recent financial statements (following), evaluate and • recommend appropriate action on the loan request.

P3-20: Common-size statement analysis A common-size income statement for Creek Enterprises’ 2014 operations follows. Using the firm’s 2015 income statement presented in Problem 3–18, develop the 2015 common-size income statement and compare it with • the 2014

statement. Which areas require further analysis and investigation? •

P3-21: The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in the manufacture of craft papers. Some financial statement

values for each company follow. Use them in a ratio analysis that • compares the firms’ financial leverage and profitability.