PEC2143_INTERNATIONAL TRADE

A nation’s comparative advantage in the production of an item is determined by                          .

• A.       which country has already specialized in the production of the item.

• B.       the total and marginal cost of producing the item.

• C.       the lower opportunity cost of producing the item relative to a trading partner’s.

• D.      specialization in the production of all goods.

Protectionism can best be described as                          .

• A.       imposing tariff barrier only.

• B.       reducing export duties to raise the price of export.

• C.       increasing import duties to reduce imported goods.

• D.      the actions and policies are taken by the government to restrict imports.

International trade benefits trading countries because it leads to                           .

• A.       greater efficiency.

• B.       greater self-sufficiency.

• C.       higher product prices.

• D.      lower standard of living

Term of trade refers to the                           .

• A.       balance from all international transactions.

• B.       rate of exchange between the domestic currency and foreign currencies.

• C.       the ratio of the export of goods to the import of goods.

• D.      difference between invisible exports and invisible imports.

A quota affects trade by                          .

 

• A.       limiting the number of goods that can be imported

• B.       imposing a tax on imported goods

• C.       offering a subsidy to producer who exports to foreign countries

• D.      the voluntary action of foreign manufacturers to limit their exports.

The manufacturer of a personal computer was selling the computer at RM2,000 per unit in the origin market. This manufacturer sells these computers abroad for RM1,800 per unit. This is an example of   ____________.

• A. quota

• B. embargo

• C. dumping

• D. specific tariff

 

If Japan has an absolute advantage in the production of an item,it must also have a comparative advantage in the production of that item .

• TRUE

• FALSE

Countries import goods for which they have a comparative advantage.

• TRUE

• FALSE

When Country A produces 400 tonnes of corn oil, while Country B produces 700 tonnes of corn oil,  Country B has absolute advantage to produce corn oil

• TRUE

• FALSE

Tariff is the volume of imported goods from other countries will protect infants industries compete in the market goods.

• TRUE

• FALSE