If the countries were to trade along the lines of absolute advantage ?

Related Mcqs:

1. When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

   A. trade diversion
   B. trade channeling
   C. trade creation and trade diversion
   D. trade creation

2. If countries were to trade along the lines of comparative advantage ?

   A. A would export X to B
   B. A would export Y to B
   C. Neither country would want to trade
   D. None of the above

3. Following World War II the United States and other countries sought to liberalize trade among each other the first major postwar step toward trade liberalization was the ?

   A. General Agreement on Tariffs and Trade
   B. World Trade Organization
   C. Smoot Hawley Organization
   D. McKinley Agreement on Trade policy

4. According to the trade theory of Staffan Linder trade tends to be most pronounced in manufactured goods when trading countries have ?

   A. similar endowments of natural resources
   B. similar levels of technology
   C. similar per-capita incomes
   D. similar wage levels

5. Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?

   A. relatively high; relatively large
   B. relatively high; relatively small
   C. relatively low ; relatively large
   D. relatively low ; relatively small

6. According to the Principle of absolute advantage Japan should ?

   A. Export steel
   B. Export DVDs
   C. Exports steel and DVDs
   D. There is no basis for gainful specialization and trade

7. Absolute advantage is determined by ?

   A. actual differences in labor production between countries
   B. relative differences in labor productivity between countries
   C. Both (a) and (b)
   D. Neither (a) nor (b)

8. Country A has an absolute advantage in__________?

   A. Product X
   B. Product Y
   C. Neither X nor Y
   D. Both X and Y

9. Country B has an absolute advantage in ?

   A. Product X
   B. Product Y
   C. Neither X nor Y
   D. Both X and Y

10. Country A has an absolute advantage in ?

    A. Beer
    B. Wine
    C. Both products
    D. neither products