foundations of modern trade theory MCQs – Page 3

Practise focused foundations of modern trade theory questions with marked answers for exam preparation and subject revision.

foundations of modern trade theory Mcqs
41. If countries were to trade along the lines of comparative advantage ?
comments icon0

A. A would export X to B

B. None of the above

C. A would export Y to B

D. Neither country would want to trade

42. If a country has a liner (downward sloping) production possibilities frontier, then production is said to be subjected to ?
comments icon0

A. increasing opportunity costs

B. decreasing opportunity costs

C. first increasing and then decreasing opportunity costs

D. constant opportunity costs
43. In aukarky, when a community maximizes its standard of living, its production and consumption point is ?
comments icon0

A. cant tell without more information

B. below the production possibility frontier

C. On the production possibility frontier

D. above the production possibility frontier

44. Comparative advantage is determined by ?
comments icon0

A. actual differences in labor productivity between countries

B. relative differences in labor productivity between countries

C. Both (a) and (b)

D. Neither (a) nor (b)

45. The Relative price (MRT)of S in terms of T i ?
comments icon0
A. 1/2

B. 2

C. 1000

D. 0

46. According to the Classical theory of international trade ?
comments icon0

A. Only countries with high wages will import

B. Only countries with low wages will export

C. All of the above are false

D. Countries with high wages will have higher prices