Question

1) Suppose that company B in the UAE imports 8,000 tonnes of banana from Indonesia for 500 US dollar per tonne. If company B pays an ad-valorem tariff of 10% on the banana imports, how much is the total tariff revenue collected by the UAE government?

                              a) 800 US dollar

                              b) 400,00,000 Dirhams

                              c) 400,000 US dollar

                              d) 50 US dollar

2) A typical measure of how much a country participates in the international trade is …

                              a) the growth rate of the country’s GDP

                              b) the size of the country’s economy or GDP

                              c) the geographic area and population size of a country

                              d) the index of openness

3) Which statement is correct according to Adam Smith’s theory of Absolute Advantage?

                              a. The amount of labor required to produce goods determines the cost of traded goods

                              b. Differences in cost of production determine the patterns of international trade

                              c. Trade is beneficial when each country is a least cost producer of one of the goods being traded

                              d. All of the above

4) What causes differences in economic growth between countries?

                              a) Differences in economic policies, political and socioeconomic environment

                              b) Availability or lack of physical capital

                              c) Availability or lack of factors of production

                              d) All of the above

5) An economic gain from free trade in the form of increased consumption of goods and service is called……

                              a) Dynamic gain

                              b) Political gain

                              c) Static gain

                              d) All of the above

6) The economics law states that ‘quantity of a product producers offer for sale increases as the market price of a product rises and vice isa”

                              a) the law of supply and demand

                              b) the law of supply

                              b) the law of demand

                              c) the producer surplus

7) international economics focuses on the economic study of:

                              a) domestic product marketing activities

                              b) commercial interactions between a government and companies in a country

                              c) commercial interaction that takes place between two or more countries

8) What is the benefit of joining a free trade for a country?

                              a) Improved competitiveness of its economy

                              b) Transfer of technology and knowhow

                              c) Consumption of more and diverse goods and services

                              d) All of the above are benefits

9) Which one is true about countries of the world?

                              a) Only large countries involve in an international trade

                              b) Openness of countries to international trade vary between countries

                              c) Countries produce, exchange, and consume goods and services

                              d) Economic development of countries is little affected by the extent of their engagement in international trade

                              e) b and c

10) Which statement is correct according to Adam Smith’s theory of Absolute Advantage?

                              a. The amount of labor required to produce goods determines the cost of traded goods

                              b. Differences in cost of production determine the patterns of international trade

                              c. Trade is beneficial when each country is a least cost producer of one of the goods being traded

                              d. All of the above

Answer 1

1. Company B imports $(500 * 8000) = $4000,000 worth of Banana and if they pay 10% ad-valorem tariff on banana imports, then tariff revenue = $(4000,000 * 10%) = $400,000

Answer: option C