BUSAD 101 - Introduction to Business » Spring 2020 » Chapter 4 Quiz

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Question #1
A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of ________.
A.   a protective tariff
B.   an import quota
C.   dumping
D.   an exchange control
Question #2
Many developing nations have lower per capita incomes than highly developed countries. This fact ________.
A.   means that they are only likely to purchase low-tech merchandise
B.   means that the developing nations are unlikely to experience much economic growth
C.   indicates that they represent an insignificant market for most products
D.   does not mean there is little opportunity for sales
Question #3
Which of the following countries has the highest per-capita GDP?
A.   Qatar
B.   United States
C.   United Arab Emirates
D.   Brunei
Question #4
Which of the following statements is true regarding comparative advantage?
A.   Every country possesses an absolute advantage.
B.   Developing countries possess no comparative advantage.
C.   A nation must first possess an absolute advantage in a particular area before it can gain a comparative advantage.
D.   Comparative advantage is becoming rarer these days.
Question #5
The United States has a trade surplus with which of the following items?
A.   services
B.   oil
C.   technology products
D.   textiles
Question #6
Which of the following groups is likely to be hurt economically if the value of the U.S. dollar rises relative to the euro?
A.   American farmers exporting goods to Europe
B.   American tourists visiting Europe
C.   European firms exporting goods to the United States
D.   American firms with euro-dominated loans
Question #7
A less-developed country wants to build new port facilities, which will allow it to increase agricultural exports. Financing for this project could come from the ________.
A.   World Bank
B.   International Monetary Fund
C.   United Nations
D.   World Trade Organization
Question #8
Which of the following statements is true of subcontracting?
A.   Subcontracting can unintentionally result in child labor or other unethical business practices.
B.   Subcontracting uses subcontractors who have limited knowledge of a company's local culture.
C.   Subcontracting usually results in high import duties and labor costs.
D.   Subcontracting is not an option for mail-order companies.
Question #9
Assume a nation has a comparative advantage in the production of clothing. If the value of this country’s currency rises, ________.
A.   its comparative advantage will increase
B.   its comparative advantage will decrease
C.   an absolute advantage will be created
D.   its comparative advantage will stay the same

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