Common Terms Of Trade! Basic Trivia Test

1. Exports:

The goods a country produces to sell to other countries.

The goods a country receives from another countries.

None of the above.

The correct answer is "The goods a country produces to sell to other countries." This answer accurately defines exports as the products that a country manufactures or produces with the intention of selling them to other countries. It implies that exports are not the goods received from other countries, but rather the goods that are sent out to be sold abroad.

Explanation

The correct answer is "The goods a country produces to sell to other countries." This answer accurately defines exports as the products that a country manufactures or produces with the intention of selling them to other countries. It implies that exports are not the goods received from other countries, but rather the goods that are sent out to be sold abroad.

2. Imports:

The goods a country receives from another countries.

The goods a country produces to sell to other countries.

None of the above.

The correct answer is "The goods a country receives from another countries." This is because imports refer to the goods or services that a country purchases from other countries. It includes products that are brought in from abroad to meet domestic demand or to be used for further production.

Explanation

The correct answer is "The goods a country receives from another countries." This is because imports refer to the goods or services that a country purchases from other countries. It includes products that are brought in from abroad to meet domestic demand or to be used for further production.

3. Comparative advantage:

When a country can produce a product with lest opportunity cost than another.

When a country can produce a product more efficiently than another.

None of the above.

Comparative advantage refers to a situation where a country can produce a product with less opportunity cost than another country. This means that the country can produce the product at a lower cost in terms of the alternative goods or services that could have been produced instead. By specializing in the production of goods or services with lower opportunity cost, countries can trade with each other and benefit from the differences in their production efficiencies, leading to overall economic gains.

Explanation

Comparative advantage refers to a situation where a country can produce a product with less opportunity cost than another country. This means that the country can produce the product at a lower cost in terms of the alternative goods or services that could have been produced instead. By specializing in the production of goods or services with lower opportunity cost, countries can trade with each other and benefit from the differences in their production efficiencies, leading to overall economic gains.

4. Absolute advantage:

When a country can produce a product more efficiently than another.

When a country can produce a product with lest opportunity cost than another.

None of the above.

The correct answer is "When a country can produce a product more efficiently than another." This explanation is based on the concept of absolute advantage, which refers to a country's ability to produce a product using fewer resources or at a lower cost compared to another country. It implies that the country has a competitive edge in terms of production efficiency, allowing it to produce more output with the same amount of resources or produce the same output with fewer resources.

Explanation

The correct answer is "When a country can produce a product more efficiently than another." This explanation is based on the concept of absolute advantage, which refers to a country's ability to produce a product using fewer resources or at a lower cost compared to another country. It implies that the country has a competitive edge in terms of production efficiency, allowing it to produce more output with the same amount of resources or produce the same output with fewer resources.

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