Question

28) The economics law states that ‘the quantity of a product consumers are willing to buy decreases as the market price of the product rises and vice versa”

                              a) the consumer surplus

                              b) the law of supply and demand

                              c) the law of supply

                              d) the law of demand

29) Lose in consumer benefit due to a tariff imposed on imported consumer good is called:

                              a) Net-welfare gain

                              b) Consumer deadweight cost

                              c) Consumer surplus

                              d) Producer deadweight cost

30) The number of units of a country's currency required to buy the same amount of goods in domestic market as a US dollar would buy in the United States is called:

                              a) Purchasing power of a dollar

                              b) A foreign currency exchange rate

                              c) A purchasing power parity exchange rate

                              d) Per capita income

31) A country’s gain or benefit from free trade in the form of economic growth is called_____:

                              a) Consumer surplus

                              b) Static economic gain

                              c) Producer surplus

                              d) Dynamic economic gain

32) The two major categories of trade protection measures (barriers) are:

                              a) Tariff and subsidy

                              b) Tariff and quota

                              c) Tariff and non-tariff barriers

                              d) Tariff and technical barriers

33) Consider two countries J and K. Both of them have equal amount of gross domestic product (GDP) measured in USA dollars. If the cost of living is cheaper in country K than in country J, which country do you think has a larger GDP in Purchasing Power Parity (PPP) measured in international dollars?

                              a) It is difficult to know this

                              b) Both have still equal GDP PPP

                              c) Country J

                              d) Country K

34) In the last 20 or so years which geographic region has achieved the highest increase in progress or the value of international trade?

                              a) Middle East

                              b) Europe

                              c) North America

                              d) Asia (including Australia and New Zealand)

                              e) Latin America

35) How does trade affect the economy of a country or countries?

                              a) Enables import of capital goods and transfer of technology

                              b) It enhances competition among industries

                              c) It helps to create and expand markets for products

                              d) All of the above

36) Goods and services produced by economic agents in one country and sold to other countries

                              a) Import

                              b) Export

                              c) Both import and export

Answer 1

28.) d. The law of demand which states that with an increase jn prices the quantity demanded decreases as the consumer is willing to buy less due to low money capacity.

29.) b. Consumers deadweight cost is the amount of price that the consumer is less likely to pay due to low utility received. As he feels the prices are too high in comparison to the utility.

30.) c. Purchasing power parity exchange is the assessment of various foreign currencies exchange regime which defines the purchasing power if various currencies for buying a "basket of goods".

31.) d. Dynamic economic gain which would define the amount of profit that country with free trade agreement can earn. These profits are always dynamic as they do not account for fixed trade.

32.) c. Tariff and non tariff barriers they are the two mediums through which countries can control the amount of export and import in their countries.