This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 26 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 26 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Countries gain when they produce items they are most efficient at producing and that have the lowest opportunity cost. A) Absolute Advantage. B) Comparative Advantage. C) Law of Comparative Advantage. D) Absolute Disadvantage. Show Answer Correct Answer: C) Law of Comparative Advantage. 2. When was NPCI founded? A) 2008. B) 2006. C) 2007. D) 2009. Show Answer Correct Answer: A) 2008. 3. Which of the following is not an assumption of classical theory of international trade? A) There are two factors of production, labour and capital. B) Industry is assumed to have constant opportunity cost ratio. C) Factors are mobile within the country but immobile across the countries. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. Import quotas are most commonly administered A) By permitting all imports until the quota is filled for the year, then none after that. B) By taxing imports. C) By auctioning import licenses to the highest bidder. D) By granting import rights to foreign firms or governments. Show Answer Correct Answer: D) By granting import rights to foreign firms or governments. 5. The removal of trade barriers so that goods can flow freely between countries. A) Free Trade. B) Business Opportunity. C) Open Borders. D) Non-sanctioned purchases. Show Answer Correct Answer: A) Free Trade. 6. Arrange the groups of economic integration in order from low to high (Arrange the groups of economic integration in low to high order) 1) Free Trade Area (Free Trade Area) 2) Economic Union (Economic Union) 3) Common Market (Common Market) 4) Tatkar Sangh (Zakat Sangh) A) 1, 4, 3, 2. B) 1, 3, 2, 4. C) 2, 1, 4, 3. D) 1, 3, 4, 2. Show Answer Correct Answer: A) 1, 4, 3, 2. 7. What will be the effect of depreciation? A) Imports will be cheaper. B) Exports will be cheaper. C) Imbalance in balance of payments. D) All. Show Answer Correct Answer: B) Exports will be cheaper. 8. A tax placed on goods imported into a country A) Quota. B) Export. C) Tariff. D) Embargo. Show Answer Correct Answer: C) Tariff. 9. The EU is better seen as an example of ..... A) A Economic and monetary union. B) Free trade area. C) A Customs Union. D) A Complete Economic integration. Show Answer Correct Answer: A) A Economic and monetary union. 10. Import quotas tend to result in all of the following except: A) Domestic producers of the imported good being harmed. B) Domestic consumers of the imported good being harmed. C) Prices increasing in the importing country. D) Prices falling in the exporting country. Show Answer Correct Answer: A) Domestic producers of the imported good being harmed. 11. For advanced countries such as the US, tariffs on imported raw materials tend to be A) Equal to tariffs on imported manufactured goods. B) Lower than tariffs on imported manufactured goods. C) Higher than tariffs on imported manufactured goods. D) The highest of all tariffs. Show Answer Correct Answer: B) Lower than tariffs on imported manufactured goods. 12. ..... is the ability to produce a good at a lower opportunity cost than another producer. A) Comparative advantage. B) Appreciation. C) Absolute advantage. D) Deprecation. Show Answer Correct Answer: A) Comparative advantage. 13. What formula do we use to find Comparative Advantage? A) We Give Up / If We Make. B) If We Make / We Give Up. Show Answer Correct Answer: A) We Give Up / If We Make. 14. International trade only refers to the exchange in goods between countries. A) True. B) False. Show Answer Correct Answer: B) False. 15. Under a tariff-rate quota: A) The within-quota tariff rate exceeds the over-quota tariff rate. B) The over-quota tariff rate exceeds the within-quota tariff rate. C) The within-quota tariff rate equals the over-quota tariff rate. D) The within-quota tariff rate plus over-quota tariff rate equal 100 percent. Show Answer Correct Answer: B) The over-quota tariff rate exceeds the within-quota tariff rate. 16. Increasing per capita output becomes very difficult for a developing country when: A) Government monetary policies make more credit available. B) Too much foreign aid is available. C) Continued population growth occurs. D) Economic reforms make more funds available for development. Show Answer Correct Answer: C) Continued population growth occurs. 17. Which of the following is NOT a criticism of international institutions? A) They ignore potentially large adjustment costs for developing countries. B) They fail to understand the effect of their policies on vulnerable nations. C) They violate national sovereignty by imposing unwanted domestic policies. D) Their decision making is biased in favour of developing countries. Show Answer Correct Answer: D) Their decision making is biased in favour of developing countries. 18. If the export value is more than import value, it shows that the rate of trade terms is ..... A) Profit. B) Loss. C) Win-win situation. D) None of above. Show Answer Correct Answer: A) Profit. 19. What does a protective tariff seek to protect? A) Protectionists. B) Free Trade. C) Revenue. D) Domestic Industries. Show Answer Correct Answer: D) Domestic Industries. 20. The purpose of the founding of the European Union (EU) in 1993 was to ..... A) Prevent the poor from causing a revolution. B) Fight the growing global network of terrorism. C) Become an economic power to compete with the United States. D) Guarantee the freedom of movement of people, goods, services, and capital. Show Answer Correct Answer: D) Guarantee the freedom of movement of people, goods, services, and capital. ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 3International Economics Quiz 4International Economics Quiz 5International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books