Free Practice Quiz Question List

2 International Trade and Trade Policy Online Quiz Questions

Use this free practice quiz with 20 questions to review 2 International Trade and Trade Policy, test your knowledge, and prepare for your next test or exam.

20 questions

Written response

1 point

Two countries agree on the price at which they will exchange their goods. What economic term names this exchange price?

True or false

1 point

If international trade expands overall consumer choices, every domestic producer must also benefit.

A
True
B
False

Choose one

1 point

A country has abundant land relative to its other resources. Which trade pattern is most consistent with the role of resource endowments?

A
The country exports the good that requires the most scarce resource it has.
B
The country may export goods that use its abundant land intensively.
C
The country must import every good it can also produce domestically.
D
The country exports only goods that require no transportation.

Fill in the blank

1 point

A government requires imported products to meet a safety standard and undergo testing. This is an example of a .

Choose one

1 point

Members remove trade barriers among themselves but each member keeps its own trade policy toward nonmembers. What form of regional integration does this describe?

A
A free-trade area
B
A customs union
C
A common market
D
An economic union

True or false

1 point

A common market adds arrangements to facilitate movement of factors of production, such as labor and capital, beyond the features of a customs union.

A
True
B
False

Choose all

1 point

Which subjects may a regional trade agreement cover? Select all that apply.

A
Trade in goods
B
Trade in services
C
A requirement that every member share a land border with the others
D
Investment provisions
E
Customs cooperation

Written response

1 point

A producer can make either 8 units of P or 12 units of Q in a day. What is the opportunity cost of producing 1 unit of P, measured in units of Q?

Choose all

1 point

Which are possible consequences of protecting a domestic industry through trade policy? Select all that apply.

A
It may protect domestic producers that compete with imports.
B
It may raise prices paid by consumers.
C
It may raise costs for firms that use imported inputs.
D
It ensures that no domestic worker or firm will need to adjust.
E
It necessarily gives consumers more choices.

Fill in the blank

1 point

A group of countries removes internal trade barriers and applies a common external to nonmembers.

Choose one

1 point

After a regional agreement gives member suppliers preferential treatment, a country switches from a more efficient nonmember supplier to a member supplier. What is this effect called?

A
Trade creation, because higher-cost domestic production is replaced with lower-cost partner imports.
B
A subsidy, because a government supports a producer.
C
Trade diversion, because a preference shifts purchases from a more efficient nonmember to a member supplier.
D
A quota, because the government directly limits the quantity imported.

Choose one

1 point

Under applicable rules, a government uses a measure to address certain forms of unfair pricing or subsidization. Which broad category best describes this measure?

A
A quota
B
A non-tariff measure
C
A trade remedy
D
A regional trade agreement

Open ended

1 point

Compare a customs union with a common market. Explain what they share and identify the additional feature that distinguishes a common market.

True or false

1 point

True or false: A regional trade agreement can include countries that are not geographically adjacent.

A
True
B
False

Choose one

1 point

A government requires imported appliances to pass product testing before they can be sold. Which type of trade policy measure is this?

A
A tariff
B
An import quota
C
A producer subsidy
D
A non-tariff measure

Choose one

1 point

A country imposes a tariff on an imported component that local manufacturers use. Which effect is a likely trade-off of this policy?

A
It lowers the cost of the imported component for domestic manufacturers.
B
It can raise costs for domestic manufacturers that use the imported component.
C
It sets a maximum quantity of the component that may be imported.
D
It guarantees that domestic manufacturers will sell more finished products.

Written response

1 point

Country A gives up 2 units of grain to produce a unit of cloth, while Country B gives up 1 unit of grain. Which country has the comparative advantage in cloth?

Choose one

1 point

A government wants to restrict the amount of a particular good entering the country without imposing a tax on each imported unit. Which measure directly does this?

A
It taxes each imported unit.
B
It provides grants to domestic producers.
C
It limits the quantity or value of imports.
D
It requires exporters to use a common external tariff.

Written response

1 point

After a regional agreement gives member countries preferential access, a buyer switches from a more efficient nonmember supplier to a member supplier. What is this shift called?

Choose one

1 point

A group of countries removes internal trade barriers, applies a common external tariff, and adds arrangements to facilitate movement of labor and capital. What form of integration best describes this arrangement?

A
Members keep internal trade barriers and adopt a common external tariff.
B
Members remove internal barriers but each sets its own policy toward nonmembers.
C
Members form a customs union and facilitate movement of factors such as labor and capital.
D
Members coordinate every economic policy identically.