4. International Political Economy

Global Trade — Quiz

Test your understanding of global trade with 5 practice questions.

Practice Questions

Question 1

Which theory of international trade suggests that countries gain from trade by exporting goods that they can produce relatively more efficiently, even if they do not have an absolute advantage in any good?

Question 2

A country imposes a specific tariff of $5 per unit on imported cars. If the world price of a car is $20, and the domestic supply and demand curves are given by $Q_S = 10 + P$ and $Q_D = 100 - 2P$, respectively, what will be the new domestic price of cars after the tariff?

Question 3

Which of the following scenarios best illustrates the concept of \"terms of trade\"?

Question 4

If Country A can produce 10 units of steel or 5 units of electronics, and Country B can produce 8 units of steel or 4 units of electronics, which of the following statements is true regarding their comparative advantages?

Question 5

The \"infant industry argument\" for protectionism is often criticized because: