INTERNATIONAL TRADE
MID SEMESTER EXAMINATION
PART-1
MCQS - 2019
(1) Terms of trade is determined where
(A) The offer curves of both countries is tangent with each other
(B) The offer curves of both countries intersects with each other
(C) The offer curves of a countries becomes parallel to each other
(D) None of the above
(2) The normal offer curve is :
(A) Downward- Sloping
(B) Upward - Sloping
(C) Upward sloping and non - linear
(D) Upward - sloping and concave
(3) Which of the following is not a tool used in the H-O theorem ?
(A) Demand curve
(B) PPC
(C) Isoquants
(D) Isocosts
(4) If the marginal opportunity costs in production are decreasing then
(A) The PPC will be convex to the origin
(B) The PPC will concave to the origin
(C) The PPC will be positively sloped
(D) The PPC will be L shape
(5) According to the Heckscher - Ohline trade theory
(A) A capital - abundant country will export capital - intensive good and import labour - intensive good.
(B) A labour - abundant country will export capital - intensive good and import labour - intensive good.
(C) A capital - abundant country will import capital - intensive good and export labour - intensive good
(D) None of the above
(6) Social indifference curve represents
(A) The tastes and preferences including utility of the community of a country under consideration.
(B) The baskets of goods and services that are indifferent
(C) The society's demand and supply
(D) None of the above
(7) Production possibility curve may exhibit the possibility of production of two commodities
(A) True
(B) False
(C) Both A and B
(D) None of the above
(8) According to classical written;
(A) Factors of production can move freely
(B) Factors of production can freely move with the country but not between the nations.
(C) Factor of production can move but it takes time.
(D) None of the above.
(9) The shape of the production possibility curve for constant opportunity cost should be
(A) Concave downward slopping
(B) Linear
(C) Convex downward slopping
(D) None of the above
(10) The mercantilists did not advocate:
(A) Free trade
(B) Stimulating the nation's exports
(C) Running a trade surplus
(D) Accumulation of gold by the nation
(11) According to the price criterion of factor abundance
(A) Country A is capital abundant relative to country B if (Pk/PL) of A > (Pk/PL) of B
(B) Country A is capital abundant relative to country B if (PL/Pk) of A < (PL/Pk) of B
(C) Country B is labour abundant relative to county A if (Pk/PL) of A > (Pk/PL) of B
(D) Country A is capital abundant relative to country B if (Pk/PL) of A < (Pk/PL) of B
(12) Complete specialization in production for trading nations is possible only when production possibility curve is
(A) Concave
(B) Convex
(C) Linear
(D) None of the above
(13) The law of reciprocal demand was developed by J.S.Mill in the year
(A) 1850
(B) 1860
(C) 1848
(D)1849
(14) Full employment in trade theory is assumed to make sure that
(A) utilization of resources are good and not bad
(B) Factor prices are determined at their competitive equilibrium level.
(C) Assumption of prefect competitive works properly.
(D) All of the above.
(15) The second best option forgone to produce a good is known as
(A) Production opportunity
(B) Opportunity cost
(C) Option & best opportunity
(D) All of the above.
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
MID SEMESTER EXAMINATION
INTERNATIONAL TRADE
(IT)
MCQS = 2010 - 2011
1. The gross barter and commodity terms of trade are equal when ________
a. There is surplus in balance of trade
b. There is deficit in balance of trade
c. There is equilibrium in balance of trade
d. None of the above
2. The offer curve of a nation bulges towards the axis that measures its ______
a. Export commodity
b. Import commodity
C. Export-Import commodity
d. Non-Traded commodity
3. The slope of community indifference curve expresses _______
a. Exchange ratio between two commodities
b. Marginal rate of substitution in consumption
C. Marginal rate of transformation in production
d. None of the above
4. Nations through trade _____
a. May consume at levels beyond their production possibilities frontiers.
b. Will be limited in their consumption to points on the production possibilities frontiers.
C. Will not alter their previous production patterns.
d. Are more likely to be confined to choices inside their production-possibilities frontiers.
5. The achievement of gains from trade requires _____
a. Comparative advantage
b. Absolute advantage
c. Net Advantage
d. Both comparative and absolute advantage
6. Which of following statements is incorrect?
a. Countries normally specialize in production because they differ in resources, skills & other endowments
b. A country may in fact export a commodity in which it does not have a absolute advantage
C. If one country is extremely efficient in the production of all goods, it will normally export all of its goods rather than import.
d. If the relative price ratio of two goods is the same for a country whether or not it engages in international trade, that country will not gain from trade.
7. According to theory of comparative costs there are types of cost differences.
b. Two
a. One
c. No Specified
d. Three
8. When a country reduces its tariff barriers so that it import more
a. All trading countries probably will benefit
b. All people in both the importing and exporting countries probably will benefit
c. All people in the importing country probably will benefit
d. Nobody in the exporting country will benefit because they will end up with fewer goods
9. The terms of trade _____
a. Measures relative prices in the importing country
b. Measure relative prices in the exporting country
c. Measure how many units of goods must be given up for each unit received in trade by a trading country
d. Measures the volume of exports
10. Tariff barrier tend to _____
a. Reduce the Volume of world production
b. Reduce the efficiency of world production
c. Raise prices in tariff imposing countries
d. All of the above
11. When tariff is imposed the offer curve of a nation will _______
a. Shift towards the axis measuring its export good
b. Remain at the original position
c. Shift towards the axis measuring is import goods
d. Become a linear function.
12. According to Heckscher- Ohlin theory, trade results mainly form the fact that different countries have _______
a. Differences in tastes and preferences
b. Difference in factor endowments
c. Differences in technology
d. Differences in demand conditions
13. International and inter-regional trade differ primarily because ______
a. Comparative advantage is relevant to the former but not to the latter
b. Comparative advantage is relevant to the latter but not to the former
c. Commodities flow across national boundaries
d. Resources supplies vary as between different nations of the world
14. Foreign trade helps each country to make _____ use of its natural resources.
a. Better
b. Less
c. Optimal
d. None of these
15. Purchase of goods from one country with the object of selling than to another country is called _____ trade.
a. Indian
b. Enter port
c. Export
d. Import
16. USA should import according to H-O theory _______
a. Labor intensive goods
b. Capital intensive goods
c. Both (a) &(b)
d. None of the above
17. The imposition of custom duty improves nations welfare,
a. Always
b. Sometimes
c. Never
d. None of the above
18. Imposition of tariff will lead to ____
a. Deterioration in terms of trade
b. Improvement in terms of trade
c. Both (a) & (b)
d. No effect on terms of trade
19. Shape of the offer curve is determined by ______
a. Supply conditions
b. Demand conditions
c. Both (a) & (b)
d. None of the above
20. Offer curve was developed by _____
a. A.Pigou
b. J.M.Keynes
c. David Ricardo
d. None of the above
21. Vertical straight line portion of the offer curve depicts elasticity equal to _____
a. Infinity
b. Less than Unity
c. Greater than unity
d. Unity
22. According to Leontief, USA Exports _____
a. Capital intensive goods
b. Labor intensive goods
c. Both (a) & (b)
d. None of the above
23. According to Heckscher-Ohlin theory, production function of different countries for same product is _____
a. Different
b. Same
C. Either (a) or (b)
d. None of the above
24. Imposition of tariff leads to _____
a. Decrease in prices of imports
b. Decrease in prices of exports
c. Increase in prices of imports
d. Increase in prices of exports
25. The concept of income terms of trade was first formulated by ____
a. Taussing
b. J.S.Mill
c. Jacobviner
d. G.S. Dorrance
MID SEMESTER EXAMINATION
INTERNATIONAL TRADE
(IT)
MCQS --> 2011-2012
1) According to Leontief, U.S.A exports....
a) Capital intensive goods
b) Labor intensive goods
c) Both (a) & (b)
d) None of the above
2) Factor reversal matters when...
a) Factor endowments are similar
b) Factor endowments differ significantly
c) Factor price are same
d) None of the above
3) India should export according to H.O. theory...
a) Capital intensive goods
b) Labor intensive goods
c) Both (a) & (b)
d) None of the above
4) USA should import according to H.O. theory...
a) Labor intensive goods
b) Capital intensive goods
c) Both (a) & (b)
d) None of the above
5) Leontief tested his hypothesis with the help of...
a) Cost curve
b) Supply curve
c) Demand curve
d) Input - output table
6) Imposition of tariff leads to...
a) Decrease in price of imports
b) Decrease in price of exports
c) Increase in price of exports
d) Increase in price of imports
7) Export promotion involves encourage merits of...
a) Luxury items
b) Consumer items
c) Export products
d) Products which are completing with imports
8) An offer curve can be drawn from...
a) Price consumption curve
b) ISO - quant curve
c) Production possibility curve of a country
d) None of the above
9) The opportunity cost theory assumes that...
a) Labor is homogeneous
b) Labor is the only factor of production
c) The price or cost of a commodity can be inferred from its labor content
d) None its labor content
10) Which of the following is not true if a country has ex - change control?
a) Goods which on the basis of comparative advantage should be imported are frequently product domestically
b) Black market tend to prosper
c) Foreign exchange usually sells at different rate for different uses
d) The order of priority for imports is determined strict by supply and demand
11) The achievement of gains from trade requires...
a) Comparative advantage
b) Absolute advantage
c) Net advantage
d) Both (a) & (b)
12) Absolute cost advantage theory was propounded by...
a) Ricardo
b) Marshall
c) Adam smith
d) Malthus
13) Case of trade according to classical economists was...
a) Difference in productivity of capital
b) Differing labor productivity
c) Both (a) & (b)
d) None of the above
14) The shape of offer curve will be...
a) Non linear
b) Linear
c) Straight line
d) None of the above
15) In case of inversing marginal opportunity cost the shape of production possibilities curve will be...
a) Concave to origin
b) Convex to origin
c) Straight line
d) Horizontal line
16) Net barter terms of trade is...
a) Px / PmX100
b) Px / Pm
c) Px X Pm
d) None of the above
17) Assumption of Heckscher - online theory are...
a) Perfect competition
b) Perfect factor mobility with country
c) Immobility of factors outside the country
d) All of the above
18) F list advocated...
a) Protection to infant industry
b) Free trade
c) Both (a) & (b)
d) None of the above
19) Tariff barriers tend to...
a) Reduce the efficiency of world production
b) Reduce the volume of world production
c) Raise prices of tariff - imposing countries
d) All of the above
20) Which of the following would not be trades in the foreign exchange market?
a) Drafts
b) Time deposits
c) US dollars
d) British pounds
21) Organization, which is promoting free trade is...
a) World trade Organization
b) World bank
c) United nation development programme
d) International monetary fund
22) Protection will benefit....
a) Scarce factors of production
b) Abundant factor of production
c) Both (a) & (b)
d) None of the above
23) 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 import quantity index
c) Decrease in the import quantity index
d) None of the above
24) The value of the commodity terms of trade index remains unchanged in case of...
a) The export price index is greater than import price index
b) The change in export price index and the import price in the same percentage
c) The export price index is lower than import price index
d) None of the above
25) When the country's net and gross barter terms of trade are equal...
a) Balance of trade is in equilibrium
b) Balance of payment in equilibrium
c) Both (a) & (b)
d) None of the above
26) As a result of imposition of tariff, a nation's offer curve will...
a) Shift towards axis measuring imports
b) Remain unaffected
c) Shift towards axis measuring exports
d) None of the above
INTERNATIONAL TRADE
(IT)
MCQS - OCTOBER 2013
1) Intra - industry trade refers to the trade in ________ products.
a) Identical
b) Differentiated
c) Complementary
d) Non-related
Ans: B
2) __________ is a not a valid assumption if absolute & comparative advantage theory.
a) Full employment
b) Product technology
c) Process technology
d) Competitive technology
Ans : C
3) The commodity term of trade take into account
a) Quantity
b) Price Index
c) Ratio of price indices of imports to exports
d) Ratio of price indices of exports to imports
Ans: D
4) New Trade Theory emphasizes on
a) Economies of scale
b) Imperfect competition
c) Differentiated Products
d) All of the above
Ans: A
5) Economic Welfare of a county will be maximized when commodity terms of trade is _________.
a) Optimised
b) Minimized
c) Constant
d) Maximised
Ans: A
6) When There is increase in both the export price index & import price index by the same percentage commodity terms of trade will __________.
a) Improve
b) Remain unchanged
c) Deteriorate
d) None of the above
7) India should import _________ according to H.O. Theory.
a) Labour intensive goods
b) Capital intensive goods
c) Both (a) & (b)
d) Non of the above
8) With imposition of tariff country's terms of trade will ________.
a) Remain unchanged
b) Improve
c) Deteriorate
d) Ether (b) & (c)
9) The shape of the offer curve is _________.
a) Strainght Line
b) Linear
c) Non-Linear
d) None of the above
10) The commodity in which a nation has the least absolute disadvantage represents its area of __________.
a) Comparative advantage
b) Comparative disadvantage
c) Absolute advantage
d) cannot say
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