International Trade Concepts

Front

What is the main reason countries engage in trade with one another?

Back

B) To gain comparative advantage

Front

If Country A can produce 10 loaves of bread or 1 bicycle, and Country B can produce 15 loaves of bread or 1 bicycle, which country has the comparative advantage in producing bicycles?

Back

B) Country B

Front

Which term describes the situation when a country imports more than it exports?

Back

B) Trade deficit

Front

What happens to the price of imported goods when a tariff is applied?

Back

C) Prices increase

Front

Why might a country impose a quota on imported goods?

Back

B) To keep prices higher for domestic products

Front

What is one potential drawback of protectionism for consumers?

Back

B) Higher prices for goods

Front

What is the purpose of the World Trade Organization (WTO)?

Back

B) To regulate international trade and settle disputes

Front

How does a lower currency value affect a country's exports?

Back

B) It makes exports cheaper for other countries

Front

Which of the following is an example of a subsidy?

Back

B) A payment to farmers to keep their prices competitive

Front

What is a single resource economy?

Back

B) An economy that relies on one main product for export