This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 80 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 80 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. There are ..... stage(s) involves in the product cycle model A) 1. B) 2. C) 3. D) 4. E) 5. Show Answer Correct Answer: E) 5. 2. Although businesses actually trade with one another, it is the countries' ..... that negotiate trade agreements. A) Presidents. B) Governments. C) Stockholders. D) Public. Show Answer Correct Answer: B) Governments. 3. The Endogenous Growth Theory was a response to what? A) Criticism of the neoclassical growth models. B) Criticism of the subsidiary industry. C) Criticism to competition in both commodity and factor markets. D) Criticism to the less emphasis on the factor-proportion theory of comparative advantage. Show Answer Correct Answer: A) Criticism of the neoclassical growth models. 4. When one country has an absolute advantage in producing a product, then that country can typically benefit by ..... that product. A) Exporting. B) Importing. C) Hording it for themselves. D) None of above. Show Answer Correct Answer: A) Exporting. 5. Why is it crucial to take into account transportation costs when evaluating the overall cost of something? A) Because obtaining perfect information about prices, costs, and productivity of all goods and services in large global markets is almost impossible. B) Because technology remains constant and does not improve. C) Because the cost of shipping a product can sometimes be so high that it cancels out any advantage it may have had. D) Because not all resources in a country are suited for producing a single good. Show Answer Correct Answer: C) Because the cost of shipping a product can sometimes be so high that it cancels out any advantage it may have had. 6. Trade is a basic economic concept involving the buyingand selling of goods and services, with compensation paid by a seller to a buyer, or the exchange of goods orservices between parties. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 7. How much of the GDP, all the final goods and serves, is available for each person in a country. Used to determine a country's standard of living. A) GDP. B) GDP per capita. C) Import. D) Limited Trade. Show Answer Correct Answer: B) GDP per capita. 8. What is the main argument a government of a small country might use in times of a worsening worldwide recession to justify an increase in import tariffs and other trade protectionist policies? A to protect the country from a rise in domestic unemployment B to protect the country's terms of trade C to protect the domestic economy from increasing prices D to protect the domestic economy from the import of poor quality goods A) A. B) B. C) C. D) D. Show Answer Correct Answer: A) A. 9. What are the disadvantages of international trade? A) Higher transportation costs, cultural barriers, and trade imbalances. B) Increased competition, loss of domestic jobs, and dependency on foreign countries for essential goods. Show Answer Correct Answer: B) Increased competition, loss of domestic jobs, and dependency on foreign countries for essential goods. 10. Which of the following theories suggests that first mover advantage is significant in the export of a good? A) Product life-cycle theory. B) Theory of comparative advantage. C) Ricardo's theory. D) New trade theory. Show Answer Correct Answer: D) New trade theory. 11. Consider Peru and Argentina in a Ricardian world. Each country produces two goods, Corn and Wheat. Each country has 600 units of labor hour available. The table of unit labor costs for production of each good in each country is:If world relative price for wheat is 3.5, then A) Relative quantity of wheat supplied is 6. B) The world relative quantity of wheat supplied is 1/2. C) The world relative quantity of wheat supplied is 1/6. D) The world relative quantity cannot be determined from the information given. Show Answer Correct Answer: C) The world relative quantity of wheat supplied is 1/6. 12. What is a quota in international trade? A) A government grant to encourage production. B) An administrative and technical barrier. C) A limit on the quantity of imports. D) A tax on imports. Show Answer Correct Answer: B) An administrative and technical barrier. 13. Which of the sentences is true A) Open account is not one of the 4 methods in international Trade (True). B) Open account is one of the methods in international trade (True). C) Open account is difficult to handle to an importer (True). D) 1 & 2 (True). E) All the above are True. Show Answer Correct Answer: B) Open account is one of the methods in international trade (True). 14. The higher the firm's profit per unit sold is, the greater its profitability will be, all else being equal. A) True. B) False. Show Answer Correct Answer: A) True. 15. Which agency regulates the money supply in India? A) The Government of India. B) Commercial banks. C) Reserve Bank of India. D) None of the above. Show Answer Correct Answer: C) Reserve Bank of India. 16. When the dollar "rises" compared to other currencies, which group benefits the most? A) Those who export products overseas. B) Those who have large cash savings on hand. C) Those who import products from overseas. D) Those who apply for loans. Show Answer Correct Answer: C) Those who import products from overseas. 17. Promote competitive and sustainable local automotive industry A) SME Bank. B) UNCTAD. C) MAY. D) WIPO. Show Answer Correct Answer: C) MAY. 18. Maxicopolis can produce 100 bushels of wheat or 100 yards of cloth. Minicopolis can produce 100 bushels of wheat or 300 yards of cloth. Which city has a comparative advantage in the production of wheat? A) Maxicopolis, because they can produce more wheat and more cloth. B) Minicopolis, because they can produce more wheat and more cloth. C) Minicopolis, they give up 1/3 of a yard of cloth each time they make a bushel of wheat. That means it's less expensive (in terms of cloth) for them to make wheat than it is for Maxicopolis to make wheat. D) Maxicopolis, they give 3 yards of cloth each time they make a bushel of wheat. That means its less expensive (in terms of cloth) for them to make wheat than it is for Minicopolis to make wheat. Show Answer Correct Answer: C) Minicopolis, they give up 1/3 of a yard of cloth each time they make a bushel of wheat. That means it's less expensive (in terms of cloth) for them to make wheat than it is for Maxicopolis to make wheat. 19. International trade is NOT a key component in most nations' economies. A) True. B) False. Show Answer Correct Answer: B) False. 20. Tax placed on imports to increase their price in the domestic market A) Tariff. B) Protectionist. C) Free trade. D) Balance of payments. Show Answer Correct Answer: A) Tariff. ← PreviousNext →Related QuizzesInternational Economics QuizzesEconomics QuizzesInternational Trade Quiz 1International Trade Quiz 2International Trade Quiz 3International Trade Quiz 4International Trade Quiz 5International Trade Quiz 6International Trade Quiz 7International Trade Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books