40+ Introduction to International Trade MCQ | (Free Resource) Business Economics

Introduction to International Trade MCQ

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1. International trade increases the welfare of _______ .
a) all participating countries
b) only exporting countries
c) only importing countries
d) none of the above

2. International trade increase the _________ of participating countries.
a) output
b) profit
c) risks
d) none of the above

3. According to David Ricardo, international trade is beneficial under _________ cost.
a) comparative
b) absolute
c) equal difference in cost
d) none of the above

4. David Ricardo’s Theory assumes perfect mobility of labour ________ .
a) within the country
b) between the participating countries
c) within and between the participating countries
d) none of the above

5. Comparative cost theory is static theory because it assumes _________ .
a) there is no qualitative and quantitative change in inputs
b) labour is homogeneous within the country
c) there is no transport cost
d) none of the above

6. Ricardian theory measures comparative cost in terms of ________ .
a) man days
b) money
c) input costs
d) all of the above

7. Ricardian theory assumes that labour is _________ within the country.
a) homogeneous
b) heterogeneous
c) inefficient
d) all of the above

8. Ricardian theory can be extended to __________ .
a) more than two countries
b) only two countries
c) only to developed nations
d) only to developing nations

9. Hecksher Ohlin theory on international trade can explain ________ trade.
a) inter-regional and international
b) only inter-regional
c) only international
d) none of the above

10. Commodity X is capital intensive, when in its production capital/labour ratio is _____ than Commodity Y.
a) greater
b) less
c) equal to
d) none of the above

Answers: 1)all participating countries 2)output 3)comparative 4)within the country 5)there is no qualitative and quantitative change in inputs 6)man days 7)homogeneous 8)more than two countries 9)inter-regional and international 10)greater