Top 250+ Solved International Economics MCQ Questions Answer
Q. According to the Heckscher-Ohlin model, the source of comparative advantageis a country's
a. Technology
b. Advertising.
c. Factor endowments
d. Both A and B.
Q. One way in which the Heckscher-Ohlin model differs from the Ricardo model of comparative advantage is by assuming that __________ is (are) identical in all countries.
a. Factor of production endowments
b. Scale economies
c. Factor of production intensities
d. Technology
Q. The Heckscher-Ohlin model assumes that _____ are identical in all trading countries
a. Gross domestic product
b. Technologies
c. Factor endowments
d. Both A. and B
Q. As opposed to the Ricardian model of comparative advantage, the assumption of diminishing returns in the Heckscher-Ohlin model means that the probability is greater that with trade
a. Countries will not be fully specialized in one product
b. Countries will benefit from free international trade.
c. Countries will consume outside their production possibility frontier.
d. Comparative advantage is primarily supply relate
Q. Which of the following is false (for the Heckscher-Ohlin model)?
a. Differences in technologies could be the source of gains from trade
b. Some groups may gain and some may lose due to trade
c. Gains for the trade-related winners will tend to be larger than losses of losers.
d. None of the above.
Q. If a commodity is classified as "labor-intensive" at one set of relative factor prices but "capital-intensive" at another set of relative prices, this situation is known as
a. demand reversal.
b. factor-intensity reversal.
c. balance of payment reversal
d. factor price reversal
Q. If relatively capital-abundant country A opens trade with relatively labor- abundant country B an the trade takes place in accordance with the Heckscher-Ohlin Theorem. What would be the consequence for factor prices (w/r) in the two countries?
a. (w/r) rises in A and falls in B
b. (w/r) rises in A and also rises in B
c. (w/r) falls in A and rises in B
d. (w/r) falls in A and also falls in B
Q. An implication of the Heckscher-Ohlin Theorem is that
a. if two countries have identical tsetse, then no trade will occur between them.
b. the relative price of a country's scarce factor of production will rise when the country is opened to trade.
c. income distribution in a country does not change when a country is opened to trade.
d. two countries with identical tastes can still have a basis for trade if factor endowments of the countries differ and if the factor intensities of the commodities differ.
Q. Which of the following is international trade:
a. Trade between provinces
b. Trade between regions
c. Trade between countries
d. (b) and (c) of above
Q. Which is NOT an advantage of international trade:
a. Export of surplus production
b. Import of defence material
c. Dependence on foreign countries
d. Availability of cheap raw materials
Q. Trade between two countries can be useful if cost ratios of goods are:
a. Equal
b. Different
c. Undetermined
d. Decreasing
Q. Modern theory of international trade is based n the views of:
a. Robbins and Ricardo
b. Adam Smith and Marshall
c. Heckcsher and Ohlin
d. Saleem and Kareem
Q. Net exports equal:
a. Exports x Imports
b. Exports + Imports
c. Exports - Imports
d. Exports of services only