Meaning and basis for international trade - Jamb Economics Past Questions and Answers

Question 16:

• JAMB 1979

The 'terms of trade' means

A. The trade agreement between two countries
B. The difference in the volumes of exports of two countries
C. The value of a unit of export in relation to the value of a unit of import
D. The production of total value of exports to the value of total trade
E. None of the above

Question 17:

• JAMB 1980

International trade arise because?

A. One country has more abundant resource
B. One country has the technology to produce the commodity whilst the other has not
C. One country has the maximum comparative advantage or minimum comparative disadvantage in the production
D. One country has manpower to produce the commodity than the country
E. All of the above

Question 18:

• JAMB 1980

The terms of trade are said to be favorable only if

A. Value of total exports equals value of total imports
B. Value of merchandise exports is greater than value of merchandise imports
C. There are no balance of payments problems
D. There is an increase in the value of a unit of export in terms of imports
E. Foreign exchange reserves do not change

Question 19:

• JAMB 1981

Summary of product condition in countries i and ii
Amount of labour days, cocoa(tons) Cloth(tons)
Country i 200 600 900
country ii 200 300 800
From the above table, we can correctly say in respect of international trade that

A. Country I has absolute disadvantage in the production of both cocoa cloth
B. Country I has absolute advantage in the production of both cocoa and cloth
C. Country II has absolute advantage in the production of both cocoa and cloth
D. Country II has comparative advantage in the production of cocoa
E. Country II should leave the production of both cocoa and cloth to country I

Question 20:

• JAMB 1981

The infant industry argument for protection in developing countries recognizes the needs to employ tariffs to protect

A. Industries producing baby food and clothing
B. Industries owned by infants
C. Newly set-up industries
D. Industries in which infants will be taken care of
E. Industries that behave like infants