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WorksheetsSTMC Term 4 LE1.1 - LE1.8 Review
Total questions: 25
Worksheet time: 16mins
Name
Class
Date
1.
The concept of 'opportunity cost' highlights the benefits that can be gained from world trade.
a)
True
b)
False
2.
To enjoy the benefits of specialisation countries need to trade
a)
True
b)
False
3.
Exports are a leakage from the circular flow of income model because goods are sent overseas
a)
True
b)
False
4.
A country that has an absolute advantage in the production of all goods cannot gain from specialisation and trade
a)
True
b)
False
5.
Different countries have a comparative advantage because opportunity costs differ
a)
True
b)
False
6.
Consumers gain when a business exports goods to overseas nations.
a)
True
b)
False
7.
An open economy is one that trades freely with the rest of the world
a)
True
b)
False
8.
Revenue from exports is considered to be a leakage from the circular flow
a)
True
b)
False
9.
Multinational corporations produce more than 25% of global production
a)
True
b)
False
10.
Technical differences are not a problem in international trade.
a)
True
b)
False
11.
The principle of comparative advantage shows:
a)
That nations can benefit from specialization and trade even if they do not have an absolute advantage.
b)
That nations ought to operate as closed economies.
c)
That nations ought to concentrate on the production of only one commodity that will give a surplus that can be traded.
d)
That nations can only benefit from multilateral trade.
12.
A country (A) has an absolute advantage over another country (B) in the production of a fact if:
a)
A’s total output of coal is greater than B’s.
b)
A can produce more coal over a year.
c)
There is more demand for coal in A.
d)
A can produce coal at a lower resource cost per unit than B.
13.
The principle of comparative advantage shows that the benefits of trade rely on:
a)
Resource costs.
b)
Opportunity cost.
c)
Marginal costs.
d)
Transport costs.
14.
Australia’s main trading partners are:
a)
Russia and China.
b)
New Zealand and the USA.
c)
China and Japan.
d)
China and the USA.
15.
International trade increases the standard of living of a country because it:
a)
Increases the range of goods and services available.
b)
Enables the government to increase its revenue through the collection of tariffs.
c)
Creates employment in import-competing industries.
d)
Overcomes high transportation costs.
16.
The principle of comparative advantage is based on:
a)
The concept of opportunity cost.
b)
The money cost of producing a good.
c)
Increasing opportunity costs.
d)
Constant opportunity costs.
17.
Countries will gain by concentrating on a limited range of goods because:
a)
Producers discover new and more efficient techniques.
b)
Their scale of operation will warrant mass production methods and the increased use of capital.
c)
They are more likely to improve the product itself as a result of improved skill and research.
d)
All of the above.
18.
Australian exports are comprised mainly of:
a)
Manufactured products.
b)
Farming machinery and plant.
c)
Clothing and textiles.
d)
Agricultural and mining products.
19.
A nation will gain if:
a)
Exports increase and imports decrease.
b)
Exports decrease and imports increase.
c)
Both exports and imports increase.
d)
Both exports and imports decrease.
20.
When a country exports:
a)
Domestic producers gain and domestic consumers gain.
b)
Domestic producers lose and domestic consumers gain.
c)
Domestic producers gain and domestic consumers lose.
d)
Domestic producers lose and domestic consumers lose.
21.
Australian exports are classified into four sectors. The ranking of these export sectors, from largest to smallest is:
a)
Services, manufacturing, mining, agriculture.
b)
Mining, services, manufacturing, agriculture.
c)
Manufacturing, mining, services, agriculture.
d)
Mining, manufacturing, services, agriculture.
22.
Which of the following does not explain the change in direction of Australia’s pattern of trade in recent years?
a)
The Asia-Pacific region has achieved higher rates of economic growth than Europe and the USA.
b)
The discovery and development of major natural gas reserves in Australia is expanding.
c)
Lower transport costs have given Australia an advantage when exporting to the Asia-Pacific region compared with Europe.
d)
China has become a more significant participant in world trade.
23.
The main advantage of technological advance for world trade is:
a)
The easing of political tensions between nations.
b)
The avoidance of global depressions.
c)
The ability to sell more easily in the world’s wealth.
d)
A more efficient allocation of resources.
24.
International trade is said to be due to differences in countries’ comparative costs, which refers to:
a)
The relative efficiency of production of goods in different countries.
b)
Prices of exported goods compared to the price of imported goods.
c)
The average cost of making different goods in one country.
d)
The relative amounts of immobile resources used in different countries in the manufacture of export goods.
25.
International trade takes place because of:
a)
Inequalities in factor endowments between nations.
b)
Governments’ desires to protect their industries.
c)
Differences in price levels in various countries.
d)
Inequalities in the terms of trade.
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