International Trade MCQ 1

Questions and Answers

A country should trade only with its neighboring countries.

A country should specialize in producing goods and services in which it has the greatest comparative advantage. (correct)

A country should specialize in producing goods and services that it is absolutely most efficient in.

A country should produce all its required goods and services domestically.

The concept of national competitiveness

The ability of a country to produce goods and services more effectively than other countries (correct)

The ratio of export prices to import prices

The overall ability of enterprises in a country to compete successfully in international markets

The ratio of import prices to export prices

The overall ability of enterprises in a country to compete successfully in international markets

The ratio of export prices to import prices (correct)

The concept of national competitiveness

The overall ability of enterprises in a country to compete successfully in international markets Signup and view all the answers

A country can specialize in producing goods and services in which it is relatively most efficient Signup and view all the answers

The prices of exports and imports of a country Signup and view all the answers

They increase the cost of production and prices of Irish goods. Signup and view all the answers

Make them more attractive to the UK. Signup and view all the answers

It is passed on to customers. Signup and view all the answers

It increases national competitiveness. Signup and view all the answers

It reduces the cost of doing business. Signup and view all the answers

Study Notes

International trade involves specialization and exchange of goods and services between countries.

States that a country should specialize in producing goods/services in which it has a relative efficiency advantage.
This leads to trade for remaining requirements.

States that each country should specialize in producing goods/services it can produce more effectively than others.
Focuses on the capability to produce more efficiently than other countries.

The ratio of export prices to import prices.
Indicates how much a country pays for imports or how much its exports earn in terms of imports.

Refers to the overall ability of a country's enterprises to compete successfully in international markets.
Measures a country's success in selling goods and services abroad compared to its competitors.

Transport Costs: Ireland's location necessitates air or sea transport for all physical goods, resulting in higher production costs and prices for Irish goods.
Exchange Rates: A weakening of the euro against the pound sterling would increase the attractiveness of eurozone exports to the UK market.
Cost of Production: Increased costs are typically passed on to customers, affecting the prices of Irish goods and services.
Property Prices: High property prices can impact national competitiveness by increasing business costs and affecting the overall cost of doing business.
Corporation Tax: The corporation tax rate in Ireland can influence national competitiveness by affecting the cost of doing business and influencing investment decisions.
Infrastructure: The quality and availability of infrastructure can impact national competitiveness by affecting the ease and cost of doing business in Ireland.