#1
Which of the following is a characteristic of perfect competition?
Few sellers and many buyers
High barriers to entry
Product differentiation
Control over market price
#2
Who proposed the theory of absolute advantage in international trade?
David Ricardo
Adam Smith
John Maynard Keynes
Karl Marx
#3
Which of the following is NOT a characteristic of monopolistic competition?
Many sellers
Product differentiation
Price taker
Free entry and exit
#4
Who introduced the theory of factor proportions?
Paul Samuelson
Eli Heckscher and Bertil Ohlin
Milton Friedman
Alfred Marshall
#5
Which of the following is a characteristic of a command economy?
Private ownership of resources
Market-driven allocation of resources
Centralized planning by the government
Free competition among firms
#6
Who is known for the theory of the invisible hand in economics?
John Maynard Keynes
Adam Smith
Milton Friedman
Karl Marx
#7
What is the main principle behind the law of comparative advantage?
Countries should produce only what they are most efficient at producing
Countries should produce everything they need domestically
Countries should focus on maximizing imports
Countries should specialize in areas of low productivity
#8
Which trade theory suggests that countries benefit from specializing in the production of goods in which they have a comparative advantage and trading for goods in which they have a comparative disadvantage?
Mercantilism
Heckscher-Ohlin model
Absolute advantage theory
Comparative advantage theory
#9
What does the Linder hypothesis propose?
Countries with similar income levels tend to trade more with each other
Countries should focus on self-sufficiency to enhance economic growth
Countries with contrasting cultures have higher trade volumes
Countries with similar cultural backgrounds trade less with each other
#10
Which trade theory emphasizes the importance of transportation costs and economies of scale?
Leontief Paradox
New Trade Theory
Factor Endowment Theory
Mercantilism
#11
What does the term 'dumping' refer to in international trade?
Selling goods below their production cost in a foreign market
Refusing to trade with certain countries
Exchanging goods without monetary transactions
Exporting goods without government approval
#12
According to the Ricardian model of international trade, what determines comparative advantage?
Difference in resource endowments between countries
Difference in consumer preferences
Difference in technological capabilities
Difference in labor productivity
#13
According to the theory of comparative advantage, who benefits from international trade?
Only large corporations
Only developed countries
All trading partners
Only developing countries
#14
What is the main critique of the Infant Industry Argument?
It promotes long-term economic growth
It encourages technological innovation
It can lead to inefficiency and protectionism
It favors developed countries over developing ones
#15
What is a tariff-rate quota (TRQ) in trade policy?
A tax imposed on imports beyond a certain quantity
A limit on the quantity of a good that can be imported at a lower tariff rate
A trade agreement between two countries to eliminate tariffs
A subsidy given to domestic producers to compete with imports
#16
What is the term for a situation where a country has a comparative advantage in the production of a good but chooses not to produce it?
Resource curse
Opportunity cost
Paradox of thrift
Underutilization of resources
#17
What is a balance of trade deficit?
When a country's exports exceed its imports
When a country's imports exceed its exports
When a country has a trade surplus
When a country's imports and exports are equal