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True or False
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1
A country has a comparative advantage over another only if it is able to produce all products more cheaply.
A)True
B)False
2
David Ricardo first introduced the theory of comparative advantage.
A)True
B)False
3
If a country wishes to specialize its production, it will also want to engage in trade.
A)True
B)False
4
If a country is able to produce all products more cheaply than any other country, then there is no advantage in trade.
A)True
B)False
5
The terms of trade relate to the laws and conditions that govern trade.
A)True
B)False
6
If the prices of a country’s exports decrease and the prices of imports increase, then the terms of trade will move in its favour.
A)True
B)False
7
If a country’s trading possibilities curve lies to the right of its production possibilities curve, there are no gains from trade.
A)True
B)False
8
Protectionism is the economic policy of protecting domestic producers by putting restrictions on exports.
A)True
B)False
9
A tariff is a tax on exports; a quota is a tax on imports.
A)True
B)False
10
Domestic producers gain and domestic consumers lose as a result of the imposition of tariffs or quotas.
A)True
B)False





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