Which of the following is not an argument for protectionism ?

A. To protect infant industries
B. To increase the level of imports
C. To protect strategic industries
D. To improve the balance of payments

Free trade is based on the principle of ?

A. Comparative advantage
B. Comparative scale
C. Economies of advantage
D. Production possibility advantage

Economists suggest that an optimum tariff would be one which reduce imports to a point where___________?

A. Comparative advantage is achieved
B. Price elasticity of imports is unity and tariff revenue is maximized
C. Import prices are the same as export prices
D. Marginal social cost equals marginal social benefit

If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?

A. Common market
B. Free trade area
C. Customs union
D. Federation

Term of trade for a country are the ratio of _______________ to _____________?

A. Its opportunity costs; world opportunity costs
B. Export prices; import prices
C. Value of exports; value of imports
D. Its currency; other currencies

The term tariff, as used in international trade refers to ?

A. The price of goods when they leave the producing country
B. A limit on the quantity of a good that can be imported into a country
C. A tax on imports
D. A government payment to encourage exports

Government payments made to domestic firms in order to encourage exports are called ?

A. Side payments
B. Tariffs
C. Subsidies
D. Export quotas

The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?

A. Ricardo malthus theorem
B. Heckscher ohlin theorem
C. Lucas-laffer theorem
D. Friedman samuelson theorem

David Ricardo’s theory in favor of free trade uses the ideal of ?

A. Absolute advantage
B. Mutual advantage
C. Multilateral advantage
D. Comparative advantage

Technological improvements are similar to international trade since they both ?

A. Provide benefits for all producers and consumers
B. Increase the nation’s aggregate income
C. Reduce unemployment for all domestic workers
D. Ensure that industries can operate at less than full capacity