International Trade: Commerce Among Nations

According to the text, what is the point on which most economists agree?

• Trade among nations makes the world better off

• Trade among nations makes the world worse off

• Trade among nations has no impact on the world

• Trade among nations is irrelevant

What is the main reason consumers and firms buy abroad, as mentioned in the text?

• The product is of better quality abroad

• The product is cheaper abroad

• All of the above

• The product is not available domestically

Who benefits when a firm buys a foreign product because it is cheaper?

• None of the above

• The foreign producer only

• The domestic seller only

• Both the buyer and the foreign producer

Explain what a factor endowment is.

Explain what a comparative cost is.

What did Swedish economists Eli Heckscher and Bertil Ohlin identify as a determinant of advantage in trade?

• Technology

• Labor and capital

• Government policies

• Consumer demand

What is the main benefit of trade according to recent research mentioned in the text?

• Greater product variety

• All of the above

• Increased competition

• More efficient investment spending

Why are trade policies difficult to reform, as per the text?

• They do not have any impact on the economy

• They are not influenced by global efficiency

• They bring dislocation to firms and industries

• They are easy to implement

Which countries are often hardest hit by trade barriers, as mentioned in the text?

• Developed countries

• All countries are equally affected

• Industrialized countries

• Less developed countries

What did World Bank economists calculate about the barriers faced by exports from low-income countries?

• They have no impact on trade

• They are lower than those faced by major industrialized countries

• They are higher than those faced by major industrialized countries

• They are irrelevant in today's world