5. International Economics

Benefits Of Trade — Quiz

Test your understanding of benefits of trade with 5 practice questions.

Practice Questions

Question 1

If Country A can produce 10 units of textiles or 5 units of electronics, and Country B can produce 12 units of textiles or 6 units of electronics, what is Country A's opportunity cost of producing 1 unit of electronics?

Question 2

Which of the following scenarios best illustrates how specialization and trade based on comparative advantage can lead to an expansion of a country's consumption possibilities beyond its own production possibilities frontier (PPF)?

Question 3

Country X can produce 60 units of cars or 120 units of grain. Country Y can produce 40 units of cars or 100 units of grain. What is Country Y's opportunity cost of producing 1 unit of car?

Question 4

How does specialization based on comparative advantage contribute to a higher standard of living for consumers in trading countries?

Question 5

Country M can produce 30 units of corn or 10 units of steel. Country N can produce 20 units of corn or 5 units of steel. What is Country N's opportunity cost of producing 1 unit of corn?