This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. U.S. has an absolute advantage over Mexico in producing two goods, beef and vegetables. A) True. B) False. Show Answer Correct Answer: A) True. 2. Incoterms are specified. Conditions of liability, transfer of risk, ....., are the responsibility of the seller or buyer. A) Product quality. B) Various expenses. Show Answer Correct Answer: B) Various expenses. 3. Financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. A) Protectionism. B) Barriers to trade. C) Exchange rate. D) Subsidies. Show Answer Correct Answer: D) Subsidies. 4. Malaysia and Indonesia specialise in the production of palm oil.What is a disadvantage of specialisation? A) Concentration of labour in the activity in which it is most productive. B) Creation of jobs to meet world demand. C) Reliance on trade with other countries for other goods. D) Rising palm oil prices. Show Answer Correct Answer: C) Reliance on trade with other countries for other goods. 5. The country of Joetopia produces 4 billion gallons of cola, while the country of Amystan makes 400 million gallons of soda. Joetopia has an Absolute Advantage. A) False. B) True. Show Answer Correct Answer: B) True. 6. The results of job characteristics theory are..... A) Satisfaction decreases. B) Performance increases. C) Constant quality of work. D) Absenteeism increases. Show Answer Correct Answer: B) Performance increases. 7. All of the following are terms used to describe limitations on trade except? A) Sanctions. B) Trade Barriers. C) Trade restrictions. D) EU. Show Answer Correct Answer: D) EU. 8. The countertrade is a reciprocal buying agreement. A) False. B) True. Show Answer Correct Answer: A) False. 9. ..... production requires less labor than..... production. A) Indirect-direct. B) Correct-incorrect. C) Direct-indirect. D) Incorrect-correct. Show Answer Correct Answer: A) Indirect-direct. 10. It can include the gathering of information, negotiating, and enforcing contracts. A) Trade Balance. B) Transport Costs. C) Transaction Costs. D) Terms of Trade. Show Answer Correct Answer: C) Transaction Costs. 11. Economic arrangements that eliminate barriers to trade and investment between countries are known as A) Domestic trade. B) Emerging economics. C) Economic cooperation agreements. D) International trade. Show Answer Correct Answer: C) Economic cooperation agreements. 12. Foreign Exchange Rate A) Foreign goods shipped into a country or region. B) Rate at which one currency may be converted into another; used when world trade occurs. C) Country's total amount of exports minus the total amount of imports. D) Comparison of amounts of foreign currency taken into a country versus amounts of domestic currency paid out. Show Answer Correct Answer: B) Rate at which one currency may be converted into another; used when world trade occurs. 13. Producers benefit from exports because they cause the A) Demand for their products to increase and their prices to decrease. B) Demand for their products to decrease and their prices to increase. C) Demand and price for their products to increase. D) Demand and price for their products to decrease. Show Answer Correct Answer: C) Demand and price for their products to increase. 14. A production possibility frontier BEST illustrates the concept of A) Elasticity of supply. B) Trade-offs. C) Pareto efficiency. D) Cross-price elasticity of demand. E) Gains from trade. Show Answer Correct Answer: B) Trade-offs. 15. What does it mean when an economist says a currency is stronger? A) It can be converted to prices in any currency. B) There a few things it could buy. C) It can be exchanged for more of a lesser foreign currency. D) It will buy fewer foreign goods. Show Answer Correct Answer: C) It can be exchanged for more of a lesser foreign currency. 16. Which one of the following explains changes in the pattern of trade between the UK and the rest of the world A) UK trade with oil exporting countries has increased. This is because the exploitation of North Sea Oil has increased UK dependence on oil imports. B) The majority of UK trade in goods is now with countries outside of the European Union. C) A change in comparative advantage between the UK and newly industrialised nations has mean that the UK is now a net exporter of manufactured goods. D) A change in comparative advantage between the UK and newly industrialised nations has mean that the UK is now a net importer of manufactured goods. Show Answer Correct Answer: D) A change in comparative advantage between the UK and newly industrialised nations has mean that the UK is now a net importer of manufactured goods. 17. Baseball bats made in Kentucky are used by baseball players in Japan. A) Import. B) Export. Show Answer Correct Answer: B) Export. 18. The ability to produce more of a given product than someone else A) Absolute advantage. B) Law of comparative advantage. C) Imports. D) Exports. Show Answer Correct Answer: A) Absolute advantage. 19. The character who issued the book The Wealth of Nation is ..... A) David Ricardo. B) JM Keynes. C) Adam Smith. D) GR Terry. Show Answer Correct Answer: C) Adam Smith. 20. An official document needed by customs for goods leaving or coming into a country A) Certificate of Origin. B) Bill of Lading. C) Custom Specification. D) Bill of Exchange. Show Answer Correct Answer: C) Custom Specification. 21. Suppose the exchange rate between the United States and Mexico changes from $ 1 = 10 Peso to $ 1 = 15 Peso. What most likely would happen to the price of American goods in Mexico? A) They will remain the same. B) They could either increase or decrease. C) The will increase. D) They will decrease. Show Answer Correct Answer: C) The will increase. 22. A limit on the number of cars that can be brought into the country A) Tariff. B) Voluntary export constraint. C) Customs duty. D) Import quota. Show Answer Correct Answer: D) Import quota. 23. Chuck believes that his business has grown because of his personal involvement in every step of the way. What advice do you offer Chuck as he continues to expand his business in new Asian markets? A) Contact distributors directly to avoid misunderstandings that can arise when using third-party contacts. B) Always stick to corporate settings when doing business to avoid misunderstandings that can arise in less formal environments. C) Protect your interests by insisting on detailed contracts from the start. D) Use proper intermediaries as required in Pacific Rim nations. Show Answer Correct Answer: D) Use proper intermediaries as required in Pacific Rim nations. 24. Balance of Trade is a statement that captures the country's ..... and ..... of goods with the remaining world. A) Export and Entrepot. B) Export and Import. C) Import and Entrepot. D) Import and Export. Show Answer Correct Answer: B) Export and Import. 25. Which of the following statement is true about Comparative Advantage theory? A) The most efficient country is the one that can produce goods at the lowest opportunity cost. B) A country should import goods that it is most efficient in production. C) Countries should not trade with each other and produce all goods independently. D) It does not support free trade among nation. Show Answer Correct Answer: A) The most efficient country is the one that can produce goods at the lowest opportunity cost. 26. An advantage of specialisation:Global output is increased and living standards are raised. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 27. India IS the world's fastest-growing large economy A) False. B) True. Show Answer Correct Answer: A) False. 28. Companies can hire workers from other countries easily A) Pro. B) Con. Show Answer Correct Answer: B) Con. 29. A "clean" bill of lading shows that the goods have been received by the buyer in good condition. A) False. B) True. Show Answer Correct Answer: A) False. 30. What is the term used when a nation exports more than it imports? A) Trade surplus. B) Favorable balance of trade. C) Trade fails. D) Unfavorable balance of trade. Show Answer Correct Answer: B) Favorable balance of trade. ← 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