International Trade Theory Past Papers

[OBJECTIVE]

Subject: International Trade Theory

Time Allowed: 15 Min

Total Marks: 10

NOTE: ATTEMPT THIS PAPER ON THIS QUESTION SHEET ONLY. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.

 

Part-I Encircle the correct option, each question carries equal marks. (10)

1. The Stolper-Samuclson theorem predicts:
a) which factors are abundant
b) the level of productivity of exports
c) which goods will be exported
d) income distribution effects of trade
2. Tariffs re-allocate income from
a) Consumers to producers
b) Producers to consumers
c) Gov. ta producers
d) Consumers to foreigners
3. A nation engaging in international trade according to the Ricardian modet will find its consumption bundle
a) inside its production possibilities frontier
b) on its production possibilities frontier
¢) outside its production possibilities frontier
d) on its trade partner’s production possibilities frontier
4. Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive, it would be reasonable to expect the United States to
a) specialize completely in soybean production
b) specialize completely in avocado production
c) increase soybean production, but still produce some avocados
d) increase avocados production, but still produce some soybean
5. Intra-industry wade depends on what two characteristics of the industry and market
a) Diseconomies of scale and homogenous products
b) Non-tariff barriers and large scale foreign investment
¢) Govt. subsidies and industrial policy
d) Economies of scale and differentiated products