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GUESS THE CLASSICAL TRADE THEORIES

Total questions: 8

Worksheet time: 6mins

Name
Class
Date
1.

Country X imposes heavy tariffs on imported goods to protect its gold reserves and promote local industries.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

2.

Country Y’s king orders colonies to only sell raw materials to the home country, keeping all wealth within the empire.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

3.

Country A can produce 10 tons of cocoa using the same resources that Country B uses to make only 3 tons.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

4.

Country B can produce ships at a lower cost and in less time compared to any other country in the region. This makes Country B the most efficient shipbuilder.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

5.

Even though Country C can produce both coffee and cheese more efficiently than Country D, it specializes in coffee because its opportunity cost of producing coffee is lower than producing cheese.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

6.

Country D is less efficient than Country E in producing both shoes and electronics, but it specializes in shoes because the opportunity cost of producing shoes is lower than producing electronics.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

7.

Country F exports wheat because it has abundant fertile land and a relatively small population.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY

8.

Country G focuses on producing and exporting software because it has a large, highly skilled tech workforce.

a)

MERCANTILISM

b)

ABSOLUTE ADVANTAGE

c)

COMPARATIVE ADVANTAGE

d)

FACTOR ENDOWMENT THEORY