Test Bank For Macroeconomics 13th Edition Michael Parkin
Test Bank For Macroeconomics 13th Edition Michael Parkin
2
Copyright © 2019 Pearson Education, Inc.
5) Prior to international trade, if country A has a lower price of good X than does country B, then we
know definitely that
A) country B has an absolute advantage in the production of good X.
B) country B has a comparative advantage in the production of good X.
C) country A has an absolute advantage in the production of good X.
D) country A has a comparative advantage in the production of good X.
Answer: D
Topic: Comparative Advantage
Skill: Conceptual
Status: Old
AACSB: Reflective thinking
6) When the principle of comparative advantage is used to guide trade, then a country will specialize by
producing only
A) goods with the highest opportunity cost.
B) goods with the lowest opportunity costs.
C) goods for which production takes fewer worker-hour than another country.
D) goods for which production costs are more than average total costs.
Answer: B
Topic: Comparative Advantage
Skill: Conceptual
Status: Old
AACSB: Reflective thinking
7) The United States decides to follow its comparative advantage and specialize in the production of
airplanes. Which of the following will occur?
A) More airplanes will be produced in the United States.
B) There will be no change in the price of airplanes in the United States.
C) The world price of airplanes will increase.
D) The quantity of airplanes demanded in the United States will increase.
Answer: A
Topic: Gains from Trade, Changes in Production
Skill: Conceptual
Status: Old
AACSB: Analytical thinking
8) A country specializes in the production of goods for which it has a comparative advantage. We find
that
A) some producers and consumers win, some lose, but overall the gains exceed the losses.
B) all producers win.
C) all consumers win.
D) producers win, consumers lose, but overall the gains exceed the losses.
Answer: A
Topic: Gains from Trade
Skill: Conceptual
Status: Old
AACSB: Analytical thinking
3
Copyright © 2019 Pearson Education, Inc.
9) Consider a market that sells some of its goods as exports. Who does NOT benefit?
A) domestic consumers
B) domestic producers
C) workers in the industry
D) foreign consumers
Answer: A
Topic: Gains from Trade
Skill: Conceptual
Status: Old
AACSB: Analytical thinking
11) Consider a market that, with no international trade, is initially in equilibrium with quantity
demanded equal to quantity supplied at a price of $20. If the world price of the good is $10 and the
country opens up to international trade then in this market
A) imports will increase, price will fall, and quantity supplied will fall.
B) exports will increase, price will be unchanged, and quantity supplied will increase.
C) imports will increase, price will decrease, and the supply curve will shift to the left.
D) quantity demanded will decrease, quantity supplied will decrease, and price will decrease.
Answer: A
Topic: Gains from Trade, Imports
Skill: Conceptual
Status: Old
AACSB: Analytical thinking
4
Copyright © 2019 Pearson Education, Inc.
12) Based on the table below, at what world price would the country import the good?
13) Suppose the world price of a good is $4. Based on the table below, the country will
A) import 20 units.
B) export 20 units.
C) import 10 units.
D) export 10 units.
Answer: A
Topic: Imports
Skill: Analytical
Status: Old
AACSB: Analytical thinking
5
Copyright © 2019 Pearson Education, Inc.
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With some difficulty, he was persuaded to come down and speak
to his humble servant the marquis; and when he did greet him, it was
with something very like a smile at his crest-fallen appearance, and
querulous complainings.
“My good friend, these are strange times,” he observed. “I should
think your valet has hardly had time to attend to you this morning.
However, you will find plenty unoccupied at Paris to renew your
powder.—O, you wish to go at once, and shoot on your own territory.
Well; perhaps you are wise, since our kind of shooting here is not
exactly to your taste. You must take care, however; for I hear that
more bullets fly from behind the hedges there than in the open fields.
Farewell, my dear sir, for I see your companion is impatient. He
wants to be keeping guard over his wine-cellars. I wish him an ample
fortune out of the wines therein contained at this moment.”
Charles’s impatience was not only on account of his own affairs.
He distrusted Orleans so far as to be vexed that the marquis
whispered to him their plan of escape. There was no particular sign
of interest in the duke’s countenance at the relation; and it only
remained to be hoped that no harm would come of this unnecessary
confidence. The marquis was far from thinking it unnecessary, as a
word from the duke would procure passports for the whole family.
This word Orleans was prevailed upon to write, and furnished with it,
the marquis poured out his gratitude more vehemently than, but a
few months before, he would have supposed possible; and then
bade his vehicle proceed, watching from a distance how the duke
once more passed the enclosure, and took his station among the
trees as before.
The cellars were found to be indeed more than half emptied; and
of the casks that remained, one or two were staved, to drown the
gunpowder and other combustibles. No attack had been made upon
the house, and Marguerite had sufficiently got the better of her
terrors, to be ready for immediate departure. No obstacle arose, and
Steele, with Pierre under him, consented to remain in charge of the
property till Charles could return, after having deposited his family in
security.
The marquis made a rather singular-looking valet, with a manner
alternating between superciliousness and awkward deference,—a
strutting gait when he forgot what he was about, and a cringing one
when he happened to cast a glance upon his dress. He passed
muster very well, however, as a battered old soldier turned valet; his
strut passing for regimental paces, and his cringe being ascribed to
the honourable wounds he was supposed to bear. M. Raucourt took
off the attention of all who might be disposed to make remarks, by
telling everybody that he was going to see his olive groves. The
party travelled with more speed than the dismal procession from
Versailles; so that before the royal family was mournfully ushered
into the Hotel de Ville at dusk, Charles and his household were some
leagues on their journey southwards.
Chapter VIII.
UPSHOT OF FEUDALISM.
ADJUSTMENT.
Marguerite began to think that she and her family had better have
staid in Paris, since violence as foul as any there, with less chance
of redress, took place in the country. But as there were fewer marked
for destruction in a thinly peopled than in a crowded district, the work
of horror was sooner over; and within a few weeks, all was quiet
around her dwelling. No judicial inquiry whatever was made into the
fate of the marquis; and night after night, ominous gleams were seen
from afar, marking where life and property were being offered up in
expiation of former tyranny. When every neighbouring chateau that
was empty had been sealed up and guarded by the people from
being entered by its owners; and when every inhabited one had
been dismantled or converted into a pile of blackened ruins, there
was a truce. The gentry sighed over the abolition of feudalism; the
peasantry gloried in the destruction of the aristocracy; and both,
looking no farther than their own borders, supposed that all was
over, and the state of the country,—miserable as it was,—settled.
Charles and his brother knew too well what was passing in Paris
to acquiesce in this belief; but they were glad of the good effects it
seemed to produce in quieting the minds, and therefore fixing the
outward circumstances of their neighbours. People went about their
regular business once more, prices grew steady in the markets, and
the mysterious, dishonest sort of bargaining which had gone on
immediately after the destruction of the chateaux, was seen no
more. No golden timepieces now passed from hand to hand, in
exchange for the coarsest articles of clothing or furniture; and if
polished tables, or morsels of curious old china were seen here and
there in the hovels of half-starved peasants, they were not put up for
sale, and did not answer the purpose of further perplexing the values
of things. Seeing that Marguerite began to feel pretty much at her
ease once more, going to rest without presentiments of being roused
by fire, and venturing, with only the children, to transact her
necessary purchases among the peasantry, Charles began to try
whether he could make anything of his business at Paris; and set
out, in order that he might be on the spot to take advantage of the
first symptoms of tranquillity to meet the demand which would then
certainly arise.
He went to Paris before winter was quite over; and found more
promise of a settlement of public affairs than at any time since the
commencement of the revolution. Yet he would not hear of his family
joining him, till it should be known whether or not king, parliament,
and people would cordially agree in the new constitution which was
then in preparation. When there was not only a promise of this, but
all arts and artificers were actually put in requisition to render the
spectacle of taking the oath as magnificent as the occasion required,
there was no further pretence for Charles’s prudence to interfere with
the hopefulness which now seemed rational enough. He sent a
summons to Marguerite to return and witness the festival from which
her loyalty and his patriotism might derive equal gratification. But
Marguerite was detained in the country by her father’s illness,—his
last; and the children were deprived of the power of saying
afterwards that they had witnessed in Paris the transactions of that
day which was regarded at the time as the most remarkable in the
annals of France.
That day, the 14th of July, 1790, was appointed to be a high
festival throughout the kingdom: Charles passed it in the Champ de
Mars; Marguerite by the dying bed of her father; the children, under
the guardianship of their uncle Antoine, among the rejoicing
peasantry; and Steele, who had returned to Bordeaux when Charles
settled himself again in Paris, took the opportunity of visiting La
Haute Favorite for the first time after so many vicissitudes.
It seemed to them all a strange,—to the superstitious among them,
an ominous circumstance that they should be thus separated on the
occasion when all were called upon to recognize the social
agreement under which they and their successors were to live.
A gleam of the afternoon sun shone in upon the face of
Marguerite’s father as he dozed, and made him turn restlessly on his
couch. His daughter hastened to shut it out, and the movement
awoke him.
“One is fit only for the grave,” he said, “when the light which shines
on all above it becomes painful.”
“Father! you are better,” said Marguerite, turning round astonished.
“No,” said he, faintly, “not better. I cannot bear this light,—or this
heat,—or—but no matter; it will presently be over. But where is
Charles?”
“He will be here very soon; but it is only two days since you
became worse; and there has been no time for him to come yet. To-
day he is waiting upon the king, and next he will wait on you.”
“On the king!” and the old man was roused at once. “And all the
people? I fancied they had left off their duty. Who waits upon the
king?”
“The whole nation,” Marguerite replied, sighing to herself,
however, over her own view of the matter—that the king was, in fact,
waiting upon the nation. She proceeded to tell what was doing in
Paris, and remarked that she hoped they had finer weather there
than here, where it had been a day of continued rain, till the gleam
came which had wakened her father.
M. Raucourt was too ignorant of the events of the last two years to
be able to comprehend the present proceeding. He could not see
what the people had to do with the constitution; but laid the blame on
his own weak brain, when assured that the loyal men of France were
all consenting to the measure. Other tokens of ignorance were much
more affecting to his daughter. He wished to be raised in bed, so that
he might see his olive woods in the evening glow. They were no
longer there, and his attention must be diverted to something else.
He wished to behold the marquis de Thou passing the house for his
daily ride.—The bones of him he asked for were mouldering under
the ruins of his own abode.—“At least,” said M. Raucourt, “let me be
carried to the window, that I may see the chateau. It looks so finely
on the terrace! and it is so long since I saw it!”—Grass was growing
on its hearths, and the peasants’ children were playing hide and
seek among its roofless halls.
“You have not asked for the children,” said Marguerite. “If you are
so strong this afternoon, perhaps you can bear to speak to them.”
And they were sent for, and presently made their appearance from
the river-side, full of what they had been seeing and doing. They told
how one cannon was fired when the hour struck at which the royal
procession was to set out, and another when the whole array was to
be formed in the Champ de Mars, and others to represent the taking
of the oath by the king, by the representatives of the parliament, and
by Lafayette in the name of the people.
“And what is all this for?” asked the old man. “It is a beautiful
spectacle, no doubt; but there were no such things in my time as the
king and the people swearing at the same altar.”
“The people make the king swear, and some of them do not think
he likes it,”—observed Julien, unmindful of his mother’s signs.
Pauline went on,
“No more than he liked being brought prisoner from Versailles, and
having his guards’ heads cut off.”
The little girl was terrified at the effect of her words. She in vain
attempted to make up for them by saying that the king and queen
were very well now; and that the people did not expect to be starved
any more, and that everybody was to be very happy after this day.
The loyal old man said he should never be happy any more; and
groaned and wept himself into a state of exhaustion from which he
did not revive, though he lived two or three days longer.
“I wish,—I wish—” sobbed poor Pauline, “that the people had
never meddled with the king——”
“Or the king with the people,” said Julien, “for that was the
beginning of it all.”
“I am sure so do I,” said Marguerite, sighing. “It is little comfort to
say, as Antoine does, that the world cannot roll on without crushing
somebody.”
“If that somebody puts himself in the way, uncle said,” observed
Julien.
“Everybody has been in the way, I think, my dear. All France is
crushed.”
“Not quite, mamma. Uncle Antoine and Mr. Steele are sitting
between the two big vines, and they say that everybody will be
buying wine now that buying and selling are going to begin again.”
It was very true that the young men were enjoying their favourite
retreat to the utmost; gilding it with the sunshine of their
expectations, and making it as musical with the voice of hope as with
the gay songs which were wafted from the revellers below.
They were not a little pleased when their anticipations were
countenanced by a letter from Charles which reached his wife on the
day of her father’s death, and was not the less in accordance with
her feelings for having been written before tidings of the old man’s
illness had reached Paris, and being, as usual, hopeful and happy.
“I have written to Antoine,” he said, “to urge all care in the
approaching vintage, and all dispatch in the management of our
immediate business. Good days are coming at last, unless
despotism should bring on itself a new punishment, and rouse once
more the spirit of faction, which has been laid to rest this day by that
powerful spell, the voice of a united nation. It would astonish you to
see how commercial confidence has already revived; and, as a
consequence, how the values of all things are becoming fixed; and,
again, as a consequence of this, how the intercourses of society are
facilitated, and its peace promoted. It was the perception and
anticipation of this which to me constituted the chief pleasure of the
magnificent solemnity of this day. It was a grand thing to behold the
national altar in the midst of an amphitheatre filled with countless
thousands; but it was a grander to remember that these thousands
were only the representatives of multitudes more who were on tiptoe
on all our hills, in all our valleys, watching and listening for the token
that they may trust one another once more, and exchange, for their
mutual good, the fruits of their toil. It was touching to see the
battalion of children,—‘the hope of the nation,’—coming forward to
remind the state that it sways the fate of a future age; but it was
more touching to think of our own little ones, and to believe that, by
the present act, the reward of the social virtues we try to teach them
is secured to them.—It was imposing to see one golden flood of light
gush from a parting cloud, giving an aspect of blessing to what had
before been stormy; but it was as an analogy that it struck us all, and
impelled us to send up a shout like the homage of worshippers of the
sun. Has not a light broken through the dreariness of our political
tempests? There maybe,—let us hope there will be, from this day,
order in the elements of our social state. Let but all preserve the faith
they have sworn, and there will be no more sporting with life and
property, no absurd playing with baubles while there is a craving for
bread, no ruin to the industrious, and sudden wealth to such as
speculate on national distress. We may once more estimate the
labour of our peasantry, and the value of our own resources, and fix
and receive the due reward of each. We may reach that high point of
national prosperity in which the ascertainment and due recompense
of industry involve each other; when the values of things become
calculable, and mutual confidence has a solid basis.—I do not say
that this prosperity will come, but I hope it will; and if all others have
the same hope, it certainly will. It may be that the sovereign will lose
his confidence, and go back. It may be that the parliament or the
people will do the same; and then may follow worse miseries than
we have yet known. But if they see how much social confidence has
to do with social prosperity, they will refuse to disturb the tranquillity
which has been this day established.
“And now, however you may sigh or smile a the spirit of hope
which is in me and Antoine, what say you to it in the case of a
nation? Are not its commercial exchanges a most important branch
of its intercourses? Must not those exchanges be regulated by some
principle of value, instead of being the sport of caprice? Is not that
principle the due and equable recompense of labour, or (in business-
like terms) the cost of production? Is not this recompense secured by
the natural workings of interests—and can these interests work
naturally without an anticipation of recompense—that is, without
hope, inspiring confidence? Depend upon it, hope is not only the
indispensable stimulus of individual action, but the elastic pressure
by which society is surrounded and held together. Great is the crime
of those who injure it; and especially heinous will be the first trespass
on public confidence of any who have been in the Champ de Mars
this day. As that which is national springs from that which is
individual, I will add that Antoine and Steele are patriotic if they exult
in the ripening beauties of Favorite; and if you would be patriotic too,
gladden yourself with the promise of our children, and tell me, when
we meet, that you trust with me that all will be well both with our
wines and our politics.”
Summary of Principles illustrated in this Volume.
There are two kinds of Value: value in use, and value in exchange.
Articles of the greatest value in use may have none in exchange;
as they may be enjoyed without labour; and it is labour which confers
Exchangeable Value.
This is not the less true for capital as well as labour being
employed in production; for capital is hoarded labour.
When equal quantities of any two articles require an equal amount
of labour to produce them, they exchange exactly against one
another. If one requires more labour than the other, a smaller
quantity of the one exchanges against a larger quantity of the other.
If it were otherwise, no one would bestow a larger quantity of
labour for a less return; and the article requiring the most labour
would cease to be produced.
Exchangeable value, therefore, naturally depends on cost of
production.
Naturally, but not universally; for there are influences which cause
temporary variations in exchangeable value.
These are, whatever circumstances affect demand and supply.
But these can act only temporarily; because the demand of any
procurable article creates supply; and the factitious value conferred
by scarcity soon has an end.
When this end has arrived, cost of production again determines
exchangeable value.
Its doing so may, therefore, stand as a general rule.
Though labour, immediate and hoarded, is the regulator, it is not
the measure of exchangeable value: for the sufficient reason, that
labour itself is perpetually varying in quality and quantity, from there
being no fixed proportion between immediate and hoarded labour.
Since labour, the primary regulator, cannot serve as a measure of
exchangeable value, none of the products of labour can serve as
such a measure.
There is, therefore, no measure of exchangeable value.
Such a measure is not needed; as a due regulation of the supply
of labour, and the allowance of free scope to the principle of
competition ensure sufficient stability of exchangeable value for all
practical purposes.
In these requisites are included security of property, and freedom
of exchange, to which political tranquillity and legislative impartiality
are essential.
Price is the exponent of exchangeable value.
Transcriber’s Note
Words hyphenated on line or page breaks have the
hyphen removed if the preponderance of other
occurences are unhyphenated. Hyphens occuring
midline are retained regardless of other unhyphenated
occurences (step-mother/stepmother, straight-
forward/straightforward, life-time/lifetime, work-
house/workhouse, fish-women/fishwomen, door-
way/doorway).
At line 12 of page 27 in “For Each and For All”, there is
an opening double quote which seems superfluous. The
author’s intent not being clear, it has been retained.
Other errors deemed most likely to be the printer’s
have been corrected, and are noted here. The
references are to the page and line in the original. Given
the independent pagination of the original, these are
divided by volume.
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