International Trade Quiz

Questions and Answers

Why does the US import oil?

Because it does not produce enough oil (correct)

Because it has exported too much oil

Because it has exported too little oil

Because it does not produce any oil

A country with an absolute advantage can produce a good or service:

More efficiently than another country. (correct)

In twice the time as another country.

Less efficiently than another country.

More slowly than another country.

What might be the best decision for Country A based on a comparison of two products?

Focus on the seafood industry only

Focus on the petroleum industry only (correct)

Focus both on its petroleum and seafood industries

Decide to find another industry to focus on

What role does competition play in international trade?

It drives down prices for consumers. Signup and view all the answers

What kind of advantage does a country have if it can make a product more efficiently?

An absolute advantage. Signup and view all the answers

Which region specializes in diamonds?

Sub-Saharan Africa Signup and view all the answers

What is the benefit in reaching the absolute advantage in the production of one good?

To produce more units of a good while using fewer resources Signup and view all the answers

Which is the best example of a country that is dependent on other countries?

A country that has little fertile soil Signup and view all the answers

How does specialization enable countries to trade with one another?

A country can make and sell goods affordably and buy goods that it is inefficient at making. Signup and view all the answers

The Middle East is best associated with which internationally traded product?

Oil Signup and view all the answers

Which statement best describes how globalization is affecting the world?

The world is becoming more globalized and connected. Signup and view all the answers

Which is an example of a country that is overly dependent on another country for critical goods and services?

A country that imports all its oil Signup and view all the answers

It takes brothers John and Dan the same amount of time to clean the room they share, but John can mow the lawn faster than Dan. Which action would allow them to take advantage of their respective comparative advantages?

John mowing the lawn and Dan cleaning their room Signup and view all the answers

Which situation might cause a country to specialize?

Wheat production in a region with fertile soil Signup and view all the answers

A company in Maine sends lobsters to France. What is Maine doing? (Select all that apply)

Exporting products Signup and view all the answers

Study Notes

Reasons for Oil Imports

The U.S. imports oil primarily because it does not produce enough domestically.

Absolute Advantage

A country with an absolute advantage is characterized by its ability to produce goods or services more efficiently than another country.

Specialization Decision

Country A should focus solely on developing its petroleum industry for optimal efficiency.

Role of Competition

Competition in international trade lowers consumer prices, making goods more affordable.

Types of Advantage

An absolute advantage refers to a country's capability to produce a product more efficiently than others.

Regional Specializations

Sub-Saharan Africa is known for its specialization in diamonds.

Benefits of Absolute Advantage

Reaching absolute advantage allows a country to produce more units of a good while using fewer resources compared to others.

Economic Dependency

Countries with limited fertile soil are often heavily dependent on other nations for agricultural goods.

Benefits of Specialization

Specialization enables countries to produce goods affordably while importing goods they are less efficient at making.

Middle East Trade

The Middle East is primarily associated with the international trade of oil.

Globalization Impact

Globalization leads to increased interconnection among countries, enhancing trade relationships.

Dependency on Imports

A country importing all its oil exemplifies a scenario of excessive dependency on another country for critical resources.

Comparative Advantage in Actions

To leverage their individual strengths, John should mow the lawn while Dan cleans the room.

Causes for Specialization

Countries may specialize in production, such as wheat, if they are in regions with fertile soil, maximizing efficiency.

Maine's Trade Activities

Maine is engaged in international trade by exporting lobsters to France, participating in globalization, and effectively practicing trade.

Limiting Trade

Strategies for limiting trade impact future economic relations and resource availability between countries.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge of international trade concepts with this engaging quiz. Explore questions about oil imports and absolute advantages, and see how well you understand the global economy. Perfect for students and enthusiasts alike!