1) If the equilibrium price of rice is $2

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1) If the equilibrium price of rice is $2.00 per pound and government imposes a ceiling on the price of rice of $1.75 per pound, the market (or marginal) value of each pound of rice with the price ceiling in place will be

		$2.00 per pound
		$1.75 per pound
		more than $2.00 per pound
		less than $1.75 per pound

2) Which of the following beliefs is not among those that mercantilists held about trade?

		Wealth is money.
		When the people of nation X import more than they export, the nation becomes poorer as a result.
		Trade is positive-sum; that is, when people trade, both parties to the trade gain.
		To increase the wealth of nation X, the government of nation X should do its best to arrange for nation X to run trade surpluses.
		None of the above. That is, each of the above beliefs is held by mercantilists.

3) The actions of _____ are a significant reason why the “law of one price” works in reality.

		mercantilists
		arbitrageurs
		economists
		government officials

4) Which of the following international transactions is recorded on each of the countries’ current accounts?

		A citizen and resident of Vietnam buys pharmaceutical products manufactured in America
		A citizen and resident of Sweden builds a retail furniture store in the U.S.
		A citizen and resident of Saudi Arabia buys a bond newly issued by the U.S. government
		A citizen and resident of Australia buys land in the U.S.
		There’s more than one correct answer above.