T.Y B.COM
SEMESTER - 5
MID SEMESTER EXAMINATION
INTERNATIONAL TRADE
(IT)
MCQS = 2009 - 2010
1) In the study of international economics we use tools of _______
a) Micro Economic theory only
b) Macroeconomic theory only
c) Neither Micro nor Macro theory
d) Both Micro & Macro theory but we also extend, adapt and integrate them.
2) What proportion of world trade is based on absolute advantage?
a) All
b) Most
c) Some
d) None
3) The commodity in which a nation has the least absolute disadvantage represents its area of______
a) Comparative disadvantage
b) Comparative advantage
c) Absolute advantage
d) Cannot say without additional information
4) Ricardo's law of comparative advantage is based on _______
a) The opportunity cost theory
b) The labor theory of value
c) The law of diminishing returns
d) All of the above
5) The opportunity cost theory assumes that _______
a) Labor is the only factor of production
b) The price or cost of a commodity can inferred from its labor content
c) Labor is homogeneous
d) None of the above
6) If a nation gains from trade, its consumption point is _______
a) On its production possibilities frontier
b) Inside its production possibilities frontier
c) Above its production possibilities frontier
d) Any of the above
7) Increasing opportunity costs to produce more and more units of a commodity Is given by production _______
a) Concave to the origin
b) Convex to the origin
c) A Straight line
d) Any of the above
8) With trade specialization in production is likely to be ________
a) Complete with increasing costs and incomplete with constant costs
b) Compete with constant costs and incomplete with increasing costs
c) Complete with constant and increasing costs
d) Incomplete with both constant and increasing costs
9) A difference in relative commodity prices between two nations can be based upon a difference in _______
a) Factor Endowment
b) Technology
c) Tastes
d) All of the above
10) The modern theory of international trade predicts that as a result of trade, the difference in factor prices between nations ______
a) Increases
b) Diminishes
c) Remains unchanged
d) Any of the above is possible
11) The offer curve of a nation shows what the nation _______
a) Must do
b) Can do
c) Any of one above
d) is wiling to do
12) If a nations terms of trade is 2 its trade partner's terms of trade is ______
a) 4
b) 3
c) 1
d) 2
13) Dynamic factors in trade theory refer to change in ______
a) Factor endowments
b) Technology
c) Tastes
d) All of the above
14) The most Important of non-tariff trade barriers are _______
a) Health regulations
b) Quotas
c) Pollutions Standards
d) Labeling and Packaging regulations
15) When a nation imposes as import tariff, the nations offer curve will?
a) Shift away from the axis measuring the export commodity
b) Shift away from the axis measuring its import commodity
c) Not shift
d) Any of the above is possible
16) The only argument in favor of a tariff which are valid are ______
a) Protection of domestic labor, against cheap foreign labor, the scientific tariff and the reduction of domestic unemployment
b) Correction of a deficit in the nations balance of payments and improvement
c)The infant industry argument protection of industries important for a national defense and as protection against dumping
d) All of the above
17) When imports from lower-cost supplier from outside the union are replaced by goods from a higher-cost supplier from within we have _______
a) Dynamic welfare effects
b) Trade creation
c) Trade diversion
d) All of the above
18) The Shape of offer cense will be _____
a) Linear
b) Non-Linear
c) Straight Line
d) None of the above
19) The improvement in the value of gross barter terms of trade is expressed by ______
a) Decrease in the export quantity index
b) Increase in the export and import quantity index
c) Increase in the import quantity index
d) Decrease in the import quantity index
20) The value of the commodity terms of trade index remains unchanged in case of _____
a) The export price index is grater than import price index
b) The export price index is lower than the import price index
c) the change in export price index and the import price index in the same percentage
d) None of the above
21) The difference between single and double factorial terms of trade explained by ______
a) Productivity change in exports import industries
b) Productivity change in export industries
c) Productivity change in import industries
d) None of the above
22) When the country net and gross barter terms of trade are equal _______
a) Balance of trade is not in equilibrium
b) Balance payment are in equilibrium
c) Balance of trade is in equilibrium
d) None of the above
23) The improvement in the value of income terms of trade is possible, even though there is deterioration in the commodity terms of trade is due to ______
a) Decrease in Export quantity index
b) increase in export quantity index
c) Increase in import quantity index
d) None of the above
24) The theory of factor proportions analysis is propounded by ______
a) Indian Economists
b) American economists,
c) Swedish Economists
d) None of the above
25) An offer curve can be drawn from _______
a) Production possibility curve of a country
b) Price consumption curve
c) ISO quant curve
d) None of the above
26) Opportunity cost theory is explained by ______
a) Haberter
b) David Ricardo
c) J.S. Mill
d) None of the above
27) When the shape of PPC is convex to the origin then:
a) Increasing returns are found
b) Cost of two goods will increase
c) Cost of two goods will decrease
d) Returns are constant
28) As per H.O. Model at equilibrium we found there is
a) Factor price equalization
b) Equality of factors
c) Equal advantage to trading nations
d) None of the above
29) Tariffs are most common instruments of
a) Monetary policy of government
b) Commercial policy of government
c) Fiscal policy of government
d) None of the above
30) Imposition of tariffs raises
a) Prices of imported goods
b) Prices of exported goods
c) Prices of exported and imported goods
d) None of the above
31) The country discrimination, also called as _______
a) Horizontal discrimination
b) Vertical discrimination
c) Geographical discrimination
d) None of the above
32) The offer curve of a nation bends toward the axis that measures its
a) Export commodity
b) None-traded commodity
c) Import commodity
d) Export or import commodity
33) If the cost of transporting a good between two nations exceeds the pre trade price difference for the good between the two nations, then trade in that good is
a) Possible
b) Impossible
C) Reversal
d) Cannot say
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