International Trade Mock Test Quiz: Trivia!
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- 1.Autarky implies that
- A.
A country’s consumption possibilities are the same as its production possibilities
- B.
Equilibrium has been reached with the maximum gains from specialization and trade
- C.
Equilibrium has been reached with the maximum amount of international trade
- D.
The nation has such a high standard of living that there are technically no poor people
- 2.The terms of trade are?
- A.
the countries’ production possibilities curve
- B.
The autarky equilibrium
- C.
He length of time two individuals or countries have been trading
- D.
The exchange rates of two goods
- 3.A nation’s consumption possibilities frontier is?
- A.
The same as its production possibilities frontier only if there is no international trade
- B.
Never the same as its production possibilities frontier
- C.
The same as its production possibilities frontier only if there is advantageous trade
- D.
Always the same as its production possibilities frontier
- 4.The gains from trade are due primarily to the fact that?
- A.
The wealth of large, industrialized nations can be spread throughout the world
- B.
Total world output increases when each country specializes
- C.
Countries can boost their economies by increasing exports
- D.
All the above
- 5.The source of gains from trade is?
- A.
Tariffs
- B.
Self-sufficiency
- C.
Autarky equilibrium
- D.
Comparative advantage
- 6.Mutually beneficial trade cannot occur
- A.
When each country has its own comparative advantage
- B.
If one country has absolute advantages in the production of every good
- C.
When the opportunity costs of producing each good are equal for both trading partners
- D.
If total world production equals total world consumption
- 7.To maximize worldwide gains from trade, the country which should produce a good is the country that
- A.
Has the lowest opportunity cost of producing that good
- B.
Can produce that good using the fewest resources
- C.
Will produce that good using the most expensive resources
- D.
None of these
- 8.Comparative advantage
- A.
Exists only when one producer can make the product using fewer resources than any other producer
- B.
Leads to the most efficient allocation of resources and the greatest combined output
- C.
Eliminates specialization, so that each country produces all of its own needs independently
- D.
All the above are correct
- 9.Which of the following is not an economic reason for international specialization?
- A.
Some countries have educated, trained workers, which other countries have unskilled workers
- B.
Tastes and preferences tend to be different in different countries
- C.
The world price of a good is determined by the world supply and demand for the product
- D.
There is no reason for specialization
- 10.When the world price of an internationally traded product is greater than a country’s domestic equilibrium price.
- A.
The domestic price will prevail, and the world price is irrelevant
- B.
The country’s import line is horizontal
- C.
The country’s exports of the product will increase
- D.
Can not be determined
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