International Trade MCQs

International Trade MCQs

Try to answer these 20 International Trade MCQs and check your understanding of the International Trade subject.
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1: Import quota is a _____ limit on the imported quantity that is produced abroad.

A.   Legal

B.   Illegal

C.   Political

D.   General

2: Efforts by producers to gain profits from government protections such as tariffs and import quotas is called rent seeking.

A.   True

B.   False

3: A tax on imports is called ______.

A.   Custom

B.   Tariff

C.   Income

D.   GDP

4: International trade exists because ______.

A.   The Internet has created a desire for a variety of foreign goods

B.   Large conglomerates pressure small countries to take part

C.   Countries benefit by exchanging goods they have for those they lack

D.   Governments are able to collect taxes and tariffs on imports

5: Which of the following has helped to increase international trade?

A.   The imposition of tariffs and import quotas

B.   Marketing efforts to promote local products

C.   Environmental and social sustainability efforts

D.   Improved transportation methods and speeds

6: A country with few international trading partners is called ______.

A.   A monopsony

B.   An oligopoly

C.   A closed economy

D.   A mixed economy

7: Which of the following are goods included among top U.S. exports?

A.   Automobiles and aircraft

B.   Insurance and banking

C.   Sports and athletic training

D.   Nursing and home care

8: The largest percentage of goods imported into the United States come from ______.

A.   China

B.   Germany

C.   Guatemala

D.   India

9: English economist David Ricardo is remembered for developing which theory?

A.   Comparative advantage

B.   Complementary goods

C.   Contestable market

D.   Classical economics

10: When a country or region can produce a good or service at a lower opportunity cost than others, economists say it ______.

A.   Has an absolute advantage

B.   Has a comparative advantage

C.   Uses fewer resources

D.   Uses more resources

11: Trade is based on ______, not ______.

A.   Using fewer resources; absolute advantage

B.   Comparative advantage; using fewer resources

C.   Absolute advantage; lower opportunity costs

D.   Lower opportunity costs; comparative advantage

12: A footwear company can make either 100 shoes per hour or 200 sandals per hour. What is the opportunity cost of making sandals for two hours?

A.   400 sandals

B.   200 sandals

C.   200 shoes

D.   100 shoes

13: Producer surplus refers to the difference between ______ and ______.

A.   The lowest price a supplier is willing to accept for a good or service; the price it actually receives

B.   The maximum price consumers are willing to spend on a good or service; what they actually spend

C.   The amount of a product or service available for domestic consumption; what is sold abroad

D.   The value of products or services sold in the domestic market; those sold at the world market price

14: How is consumer surplus affected by imports when free trade is allowed?

A.   Increased

B.   Decreased

C.   Unchanged

D.   Eliminated

15: What happens when a country exports a good?

A.   Domestic producers are negatively affected.

B.   Domestic consumers are negatively affected.

C.   Domestic prices for that product decrease.

D.   The domestic economy is not affected.

16: When tariffs are introduced, what happens to producer surplus?

A.   It increases.

B.   It decreases.

C.   It is unchanged.

D.   It is eliminated.

17: Import quotas ______ consumer surplus.

A.   Increase

B.   Decrease

C.   Eliminate

D.   Do not change

18: What is the North American Free Trade Agreement?

A.   An organization that monitors and enforces international trade agreements

B.   A pact between the United States, Mexico, and Canada to improve trade

C.   A group working to improve the economic and social well-being of U.S. workers

D.   An international defense alliance among countries in North America

19: So ______ has a comparative advantage in producing ______.

A.   Jim; trout

B.   John; trout

C.   Jim; cherries

D.   John; both trout and cherries

20: Using tariffs to generate government revenue is most common among ________.

A.   Developed countries

B.   Developing countries

C.   Western nations

D.   None of these

21: Due to a nation's weak currency, people may have to fall back on __________.

A.   Exporting.

B.   Bartering.

C.   Importing.

D.   Factoring

22: Economies of scale based intra-industry trade models are primarily drive by ______.

A.   Wrong industrial classification

B.   Product differentiation

C.   Differences in demand.

D.   None of these