McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
Chapters
| 1. |
Trade between two countries is called |
| A. | Internal trade |
| B. | Intra-Country trade |
| C. | Intra-State Trade |
| D. | International Trade |
| Answer» D. International Trade | |
| 2. |
According to Classical economists, _ is the reason for a country to specialie in the production of a commodity |
| A. | Internalisation |
| B. | Cost differences |
| C. | International Division of labor |
| D. | Special Commodities |
| Answer» C. International Division of labor | |
| 3. |
International trade is the result of an advantage country possesses in producing a particular commodity at a _ |
| A. | Lower Cost |
| B. | Equal cost |
| C. | Higher cost |
| D. | Constant Cost |
| Answer» A. Lower Cost | |
| 4. |
Absolute difference in Cost is explained by |
| A. | David Ricardo |
| B. | Adam Smith |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. Adam Smith | |
| 5. |
According to Adam Smith, international trade is advantageous for all participating countries only if they enjoy _ difference in cost of production |
| A. | Comparative |
| B. | Equal |
| C. | Absolute |
| D. | Unequal |
| Answer» C. Absolute | |
| 6. |
Who aid the following, " The esence of international trade is not the absolute difference in cost but a comparative difference in cost." |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. David Ricardo | |
| 7. |
Ricardian theory has _ countries and commodities |
| A. | 32 |
| B. | 23 |
| C. | 24 |
| D. | 22 |
| Answer» D. 22 | |
| 8. |
Which of the following is NOT an assumption of Comparative Cost Advantage Theory? |
| A. | Perfect Competition |
| B. | Increasing return to scale |
| C. | Perfect Mobility of labor within countries |
| D. | Homogenoeus labor |
| Answer» B. Increasing return to scale | |
| 9. |
Comparative Advantage is expressed in _ |
| A. | Absolute Cost |
| B. | Variable cost |
| C. | Cost ratios |
| D. | Marginal Cost |
| Answer» C. Cost ratios | |
| 10. |
England 1 unit wine =1/2unit cloth, Portugal 1 unit wine = 1 unit cloth. This is an example of |
| A. | Comparative Cost |
| B. | Absolute Cost |
| C. | Relative Cost |
| D. | Unequal Cost |
| Answer» A. Comparative Cost | |
| 11. |
Comparative Advantage theory is based on _ value |
| A. | Cost theory |
| B. | Productivity theory |
| C. | Quality theory |
| D. | labor theory |
| Answer» D. labor theory | |
| 12. |
No change in technology, no transport cost, constant returns to scale - these assumptions make the Comparative Cost advantage theory __ |
| A. | Dynamic |
| B. | Redundant |
| C. | Static |
| D. | Unacceptable |
| Answer» C. Static | |
| 13. |
If a country enjoys an absolute advantage in the production of all commodities then also trade is possible”. Who said this? |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. David Ricardo | |
| 14. |
According to H-O theory, International trade is, but a pecial case of _ _ trade. |
| A. | Inter-state |
| B. | Intra state |
| C. | Intra-Country |
| D. | Inter-regional |
| Answer» D. Inter-regional | |
| 15. |
H-o Theory s based on value theory. |
| A. | Partial |
| B. | Semi-partial |
| C. | General |
| D. | Semi-General |
| Answer» C. General | |
| 16. |
H-O Theory is a _ _ model |
| A. | 1 X 1 X 1 |
| B. | 2 X 2 X 2 |
| C. | 3 X 3 X 3 |
| D. | 4 X 4 X 4 |
| Answer» B. 2 X 2 X 2 | |
| 17. |
Commodity Y is Capital intensive if _ _ |
| A. | Ky / Ly = Kx / Lx |
| B. | Ky / Ly < Kx /Lx |
| C. | Ky /Ly > Kx / Lx |
| D. | Ky > Kx |
| Answer» C. Ky /Ly > Kx / Lx | |
| 18. |
If,England 1 wine = 1/2 cloth and if Portugal 1 wine = 1 cloth, this I an example of |
| A. | Comparative advantage |
| B. | Absolute Advantage |
| C. | Similar Cost |
| D. | Unequal Cost |
| Answer» A. Comparative advantage | |
| 19. |
If Commodity Y requres 2 units of capital and 2 units of labor and commodity X requires 1 unit of capital and 4 units of labor then Y is |
| A. | Labor intenive |
| B. | Labor specific |
| C. | Capital Intensive |
| D. | Capital Specific |
| Answer» C. Capital Intensive | |
| 20. |
Factor intensity is measured in _ terms |
| A. | Absolute Cost |
| B. | Factor ratios |
| C. | Relative Cost |
| D. | Frequency of capital labor |
| Answer» B. Factor ratios | |
| 21. |
Total amount of labor in Nation 1 is greater than labor in nation 2 if |
| A. | TK1 /TL1 > TK2 /TL2 |
| B. | TK1 / TL1 < TK2 /TL2 |
| C. | TK1 /TL1 = TK2/TL2 |
| D. | TL1 > TL2 |
| Answer» A. TK1 /TL1 > TK2 /TL2 | |
| 22. |
Factor abundance can be explained using |
| A. | Demand curve |
| B. | Supply curve |
| C. | Tangent |
| D. | PPC |
| Answer» D. PPC | |
| 23. |
A nation is capital abundant if |
| A. | PK1/PL1 < PK2/PL2 |
| B. | PK1/PL1 >PK2/PL2 |
| C. | PK1/PL1 = PK2/PL2 |
| D. | PK1 < PK2 |
| Answer» B. PK1/PL1 >PK2/PL2 | |
| 24. |
Abundance of a factor makes it |
| A. | Easy |
| B. | More |
| C. | Expensive |
| D. | Cheap |
| Answer» D. Cheap | |
| 25. |
r1 / w1 < r2 / w2 means |
| A. | Nation 1 is capital abundant |
| B. | Nation 1 is labor abundant |
| C. | Nation 2 is capital abundant |
| D. | Nation 2 has high wages |
| Answer» A. Nation 1 is capital abundant | |
| 26. |
The rate at which goods are exchangeed between two countries is called |
| A. | Import price |
| B. | Export rate |
| C. | Foreign exchange |
| D. | Terms of trade |
| Answer» D. Terms of trade | |
| 27. |
The ratio of price of export to price of import is called |
| A. | Import price |
| B. | Export rate |
| C. | Foreign exchange |
| D. | Terms of trade |
| Answer» D. Terms of trade | |
| 28. |
Px / Pm is |
| A. | Gros barter terms of trade |
| B. | Net Barter terms oftrade |
| C. | Terms of trade |
| D. | Commodity terms of trade |
| Answer» C. Terms of trade | |
| 29. |
When many commodities are traded terms of trade is expresed as _ of its export pricr to import price |
| A. | sum |
| B. | multiple |
| C. | index ratio |
| D. | index |
| Answer» C. index ratio | |
| 30. |
If import prices rse more than export prices, terms of trade have _ |
| A. | improved |
| B. | deteriorated |
| C. | increased |
| D. | advanced |
| Answer» B. deteriorated | |
| 31. |
The limitations of Commodty terms of trade gave rise to _ |
| A. | Net barter terms of trade |
| B. | gross barter term of trade |
| C. | single factoral terms of trade |
| D. | double fctoral terms of trade |
| Answer» B. gross barter term of trade | |
| 32. |
A favourable terms of trade indicates _ imports for given exports |
| A. | more |
| B. | less |
| C. | lower |
| D. | same |
| Answer» A. more | |
| 33. |
is equally important as price of exports |
| A. | Income from exports |
| B. | Production level of exports |
| C. | amount of labor fromexports |
| D. | raw materials used for exports |
| Answer» A. Income from exports | |
| 34. |
A decline in price would increase exports if demand is__ |
| A. | inelastic |
| B. | elastic |
| C. | constant |
| D. | fluctuating |
| Answer» B. elastic | |
| 35. |
_ _ introduced the concept of Gross barter terms of trade |
| A. | Adam Smith |
| B. | Alfred Marshall |
| C. | F W Taussig |
| D. | David Ricardo |
| Answer» C. F W Taussig | |
| 36. |
Single factoral terms of trade take in to account |
| A. | Export and import prices |
| B. | Changes in efficiency of factors producing export goods |
| C. | Changes in demand for imports |
| D. | Changes in demand for exports |
| Answer» B. Changes in efficiency of factors producing export goods | |
| 37. |
Two countries can gain from foreign trade if |
| A. | Cost ratios are different |
| B. | Price ratios are different |
| C. | Both cost ratios and price ratios are different |
| D. | Tarifs are different |
| Answer» C. Both cost ratios and price ratios are different | |
| 38. |
J.S.Mill brought in _ factor to explain termsof trade |
| A. | cost |
| B. | demand |
| C. | supply |
| D. | quality |
| Answer» B. demand | |
| 39. |
Reciprocal demand is |
| A. | Mutual demand of two countries to each other’s goods |
| B. | Mutual supply |
| C. | price of export and import |
| D. | Investment |
| Answer» A. Mutual demand of two countries to each other’s goods | |
| 40. |
The developing Countries it is argued usually |
| A. | Enjoy Favourable terms of trade |
| B. | Suffers from adverse terms of trade |
| C. | have better income terms of trade |
| D. | have better bargaining power |
| Answer» B. Suffers from adverse terms of trade | |
| 41. |
Comparative advantage occurs when ……..than other country . |
| A. | A country has more population |
| B. | A country can produce more goods |
| C. | A country has a lower opportunity cost in the production of a good |
| D. | A country has more product lines |
| Answer» C. A country has a lower opportunity cost in the production of a good | |
| 42. |
A tariff------ |
| A. | Increases the volume of trade |
| B. | Reduces the volume of trade |
| C. | Has no effect on the volume of trade |
| D. | encourages foreign goods |
| Answer» B. Reduces the volume of trade | |
| 43. |
Terms of trade of less developed countries are generally unfavourable because |
| A. | They export primary goods |
| B. | They export capital goods |
| C. | They export few goods |
| D. | They import few goods |
| Answer» A. They export primary goods | |
| 44. |
According to J S Mill, equilibrium terms of trade is determined by __ demand |
| A. | Market |
| B. | Aggregate |
| C. | Effective |
| D. | Reciprocal |
| Answer» D. Reciprocal | |
| 45. |
Marshall and Edgeworth introduced a geometrical device to explain the gains from trade which is known as |
| A. | Indifference cur |
| B. | Offer curve |
| C. | Isoquant |
| D. | Demand curve |
| Answer» B. Offer curve | |
| 46. |
The concept of offer curves is associated with the names of |
| A. | David Ricardo |
| B. | J S Mill and Alfred |
| C. | Alfred Marshall an |
| D. | Edgeworth and Pareto |
| Answer» C. Alfred Marshall an | |
| 47. |
The offer curve of a country is based on |
| A. | Relative prices |
| B. | Price of exports |
| C. | Price of imports |
| D. | Volume of exports |
| Answer» A. Relative prices | |
| 48. |
Reciprocal demand is |
| A. | Mutual supply |
| B. | Ratio of volume of |
| C. | Ratio of earnings f |
| D. | Mutual demand of tw |
| Answer» D. Mutual demand of tw | |
| 49. |
In a free world in which no restrictions exist, international trade will lead to |
| A. | Reduced real li |
| B. | Reduced efficiency |
| C. | Reduced real GDP |
| D. | Increased efficiency |
| Answer» D. Increased efficiency | |
| 50. |
A commercial policy is a government policy related to _. |
| A. | Commercial transactions of private companies |
| B. | Economic transactions across international borders |
| C. | Commercial transactions of developed countries |
| D. | Taxes |
| Answer» B. Economic transactions across international borders | |
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