Introduction to International Trade (GSDR2117)
Higher Institute of Transport and Logistics (HITL)
Semester: First Semester
Level: 200
Year: 2017
THE UNIVERSITY OF BAMENDA
Higher Institute of Transport and Logistics (HITL): Continuous Assessment
Course Title: Introduction to International Trade - Course Code: TL1103 (LEVEL: 100)
Course facilitator: Martha Yuhla SHEY
INSTRUCTIONS: Answer ALI. 40 questions directly on same sheet, encircle the letter corresponding to the right answer, each correct answer =
0.5 pts. Duration: 60mins
1)
The gains from trade are due primarily to the fact that
a) The wealth of large, industrialized nations can be spread throughout the world b) total world output increases when each country
specializes c) countries can boost their economies by increasing exports
2) A nation’s consumption possibilities frontier is
a) always the same as its production possibilities frontier b) never the same as its production possibilities frontier c) the same as its production
possibilities frontier only if there is advantageous trade d) the same as its production possibilities frontier only if there is no international
trade
3) The source of gains from trade is .
a) tariffs b) self-sufficiency c) autarky equilibrium d) comparative advantage
4) Mutually beneficial trade cannot occur
a) when each country has its own comparative advantage b) if one country has absolute advantages in the production of every good c) when
the opportunity costs of producing each good are equal for both trading partners d) if total world production equals total world consumption
5) According to Ricardo, to maximize worldwide gains from trade, the country which should produce a good is the country that
a) has the lowest opportunity cost of producing that good b) can produce that good using the fewest resources c) will produce that good using
the most expensive resources
6) Comparative advantage
a.
exists only when one producer can make the product using fewer resources than any other producer
b.
leads to the most efficient allocation of resources and the greatest combined output
c.
c. eliminates specialization, so that each country produces all of its own needs independently
7) Cameroon can produce 8 units of food per day or 12 units of clothing per day. Nigeria can produce 5 units of food per day or 10 units of
clothing per day. Which of the following is true?
a.
mutually beneficial trade is not possible
b.
maximize world production, Cameroon should produce only food, Nigeria should produce only clothing. and they should trade
c
. Doth
countries
should
produce both goods and they should trade
8) Which of the following is not an economic reason for international specialization?
a
some countries have educated, trained workers, which other countries have unskilled workers
b.
tastes and preferences tend to be different in different countries
c.
the world price of a good is determined by the world supply and demand for the product
9) When the world price of an internationally traded product is greater than a country’s domestic equilibrium price,
a
The domestic price will prevail, and the world price is irrelevant
b. the country’s import line is horizontal
c. the country’s exports of the product will increase
10) We speak of "dumping” when the goods of a country are ___________ overseas at prices ____________ than the cost of production.
a) sold; higher (b) sold; lower c) purchased; lower d) purchased; higher
11) The General Agreement on Tariffs and Trade (GATT) was established in
a. 1870 to protect U.S. industries and decrease world trade
b. 1921 to manage legal and accounting requirements for U.S. tariffs and quotas
c. 1947 to reduce trade restrictions among 23 countries
12) The World Trade Organization (WTO)
a. became, in 1995, the institutionalized and more comprehensive successor to the General Agreement on Tariffs and Trade (GATT)
b. was established in 1947 to reduce trade restrictions among 23 member countries
c. was established in 1980 to oppose and counteract the policies of the General Agreement on Tariffs and Trade (GATT)
13) The most favored nation clause of the World Trade Organization requires that each member must p.
a. offer to all member countries the same trade concessions offered to any member country
b. choose one foreign member as its most-favored trading nation, and give that country its most generous trade concessions
c. offer some trade concession to any other member country offering it a trade concession ~
14) Regional trading bloc agreements
a) are not considered trade restrictions b) are required by World Trade Organization rules c) exist primarily in Russia, Africa, and South
America d) make special trade deals between countries in that region and discriminate against countries outside the region
15) The terrms of trade of a country is defined as the ratio______________________
a) domestic opportunity costs; global opportunity costs
b) value of exports/value of imports c) price of its currency; prices of other currencies
d) average export price; average import price
16) The theory of David Ricardo in favor of free trade mobilizes the concept of
a) absolute advantage b) mutual benefit c) Multilateral advantage d) comparative advantage
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