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International Trade MCQ

Economies of scale based intra-industry trade models are primarily drive by ______.

Wrong industrial classification

Product differentiation

Differences in demand.

None of these

Answer

Correct Answer: Differences in demand.

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Due to a nation's weak currency, people may have to fall back on __________.

Exporting.

Bartering.

Importing.

Factoring

Answer

Correct Answer: Bartering.

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Using tariffs to generate government revenue is most common among ________.

Developed countries

Developing countries

Western nations

None of these

Answer

Correct Answer: Developing countries

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So has a comparative advantage in producing .

Jim; trout

John; trout

Jim; cherries

John; both trout and cherries

Answer

Correct Answer: Jim; trout

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What is the North American Free Trade Agreement?

An organization that monitors and enforces international trade agreements

A pact between the United States, Mexico, and Canada to improve trade

A group working to improve the economic and social well-being of U.S. workers

An international defense alliance among countries in North America

Answer

Correct Answer: A pact between the United States, Mexico, and Canada to improve trade

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Import quotas ______ consumer surplus.

Increase

Decrease

Eliminate

Do not change

Answer

Correct Answer: Decrease

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When tariffs are introduced, what happens to producer surplus?

It increases.

It decreases.

It is unchanged.

It is eliminated.

Answer

Correct Answer: It increases.

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What happens when a country exports a good?

Domestic producers are negatively affected.

Domestic consumers are negatively affected.

Domestic prices for that product decrease.

The domestic economy is not affected.

Answer

Correct Answer: Domestic consumers are negatively affected.

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How is consumer surplus affected by imports when free trade is allowed?

Increased

Decreased

Unchanged

Eliminated

Answer

Correct Answer: Increased

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Producer surplus refers to the difference between and .

The lowest price a supplier is willing to accept for a good or service; the price it actually receives

The maximum price consumers are willing to spend on a good or service; what they actually spend

The amount of a product or service available for domestic consumption; what is sold abroad

The value of products or services sold in the domestic market; those sold at the world market price

Answer

Correct Answer: The lowest price a supplier is willing to accept for a good or service; the price it actually receives

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A footwear company can make either 100 shoes per hour or 200 sandals per hour. What is the opportunity cost of making sandals for two hours?

400 sandals

200 sandals

200 shoes

100 shoes

Answer

Correct Answer: 200 shoes

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Trade is based on , not .

Using fewer resources; absolute advantage

Comparative advantage; using fewer resources

Absolute advantage; lower opportunity costs

Lower opportunity costs; comparative advantage

Answer

Correct Answer: Comparative advantage; using fewer resources

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When a country or region can produce a good or service at a lower opportunity cost than others, economists say it ______.

Has an absolute advantage

Has a comparative advantage

Uses fewer resources

Uses more resources

Answer

Correct Answer: Has a comparative advantage

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English economist David Ricardo is remembered for developing which theory?

Comparative advantage

Complementary goods

Contestable market

Classical economics

Answer

Correct Answer: Comparative advantage

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The largest percentage of goods imported into the United States come from ______.

China

Germany

Guatemala

India

Answer

Correct Answer: China

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Which of the following are goods included among top U.S. exports?

Automobiles and aircraft

Insurance and banking

Sports and athletic training

Nursing and home care

Answer

Correct Answer: Automobiles and aircraft

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A country with few international trading partners is called ______.

A monopsony

An oligopoly

A closed economy

A mixed economy

Answer

Correct Answer: A closed economy

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Which of the following has helped to increase international trade?

The imposition of tariffs and import quotas

Marketing efforts to promote local products

Environmental and social sustainability efforts

Improved transportation methods and speeds

Answer

Correct Answer: Improved transportation methods and speeds

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International trade exists because ______.

The Internet has created a desire for a variety of foreign goods

Large conglomerates pressure small countries to take part

Countries benefit by exchanging goods they have for those they lack

Governments are able to collect taxes and tariffs on imports

Answer

Correct Answer: Countries benefit by exchanging goods they have for those they lack

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A tax on imports is called ______.

Custom

Tariff

Income

GDP

Answer

Correct Answer: Tariff

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Efforts by producers to gain profits from government protections such as tariffs and import quotas is called rent seeking.

True

False

Answer

Correct Answer: True

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Import quota is a _____ limit on the imported quantity that is produced abroad.

Legal

Illegal

Political

General

Answer

Correct Answer: Legal

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International Trade MCQ

Economies of scale based intra-industry trade models are primarily drive by ______.

Due to a nation's weak currency, people may have to fall back on __________.

Using tariffs to generate government revenue is most common among ________.

So ______ has a comparative advantage in producing ______.

What is the North American Free Trade Agreement?

Import quotas ______ consumer surplus.

When tariffs are introduced, what happens to producer surplus?

What happens when a country exports a good?

How is consumer surplus affected by imports when free trade is allowed?

Producer surplus refers to the difference between ______ and ______.

A footwear company can make either 100 shoes per hour or 200 sandals per hour. What is the opportunity cost of making sandals for two hours?

Trade is based on ______, not ______.

When a country or region can produce a good or service at a lower opportunity cost than others, economists say it ______.

English economist David Ricardo is remembered for developing which theory?

The largest percentage of goods imported into the United States come from ______.

Which of the following are goods included among top U.S. exports?

A country with few international trading partners is called ______.

Which of the following has helped to increase international trade?

International trade exists because ______.

A tax on imports is called ______.

Efforts by producers to gain profits from government protections such as tariffs and import quotas is called rent seeking.

Import quota is a _____ limit on the imported quantity that is produced abroad.

So has a comparative advantage in producing .

Producer surplus refers to the difference between and .

Trade is based on , not .