why trade

Question 2

What is the definition of international trade?

Answer 2

The exchange of capital, goods and services across international borders or territories.

Question 3

What allows residents of different countries to specialize in production?

Answer 3

International trade.

Question 4

What are two reasons trade occurs?

Answer 4

• Specialization in production
• Lower costs from foreign producers.

Question 5

List three advantages of international trade.

Answer 5

• Increased production
• Production efficiency through specialization
• Wider choices for consumers

Question 6

List three disadvantages of international trade.

Answer 6

• Structural unemployment may occur
• Dependency on global markets
• Domestic industries may struggle with imports.

Question 7

What is absolute advantage?

Answer 7

The ability of one person or nation to produce a product at a lower resource cost than another.

Question 8

Which country has an absolute advantage in producing blueberries according to the provided data?

Answer 8

Country X.

Question 9

Which country has an absolute advantage in producing pumpkins according to the provided data?

Answer 9

Country Y.

Question 10

What is comparative advantage?

Answer 10

The ability to produce a good or service at a lower opportunity cost than other producers.

Question 11

Which country has a comparative advantage in producing blueberries?

Answer 11

Country X.

Question 12

Which country has a comparative advantage in producing pumpkins?

Answer 12

Country Y.

Question 13

Fill in the blank: Trade allows countries to consume beyond what they can individually produce at Point ____.

Answer 13

E

Question 14

True or False: Jack and Charlie should trade with one another based on their specialization.

Answer 14

True.

Question 15

What is the importance of trade to an economy?

Answer 15

Trade leads to increased production, efficiency, and consumer choices.

Question 16

What are Free Trade Agreements (FTAs)?

Answer 16

Agreements between countries to reduce trade barriers and increase trade.

Question 17

What is the impact of specialization on total output?

Answer 17

Total output increases.

Question 18

What is the opportunity cost for Country X to produce 1kg of blueberries?

Answer 18

0.5kg of pumpkins.

Question 19

What is the opportunity cost for Country Y to produce 1kg of blueberries?

Answer 19

1.33kg of pumpkins.

Question 20

What is the significance of the Law of Diminishing Returns in trade models?

Answer 20

It does not apply in the simple model of trade described.

Question 21

In the example provided, how much can Country X produce if it specializes in blueberries?

Answer 21

240kg.

Question 22

In the example provided, how much can Country Y produce if it specializes in pumpkins?

Answer 22

300kg.

Question 23

What happens to domestic industries with an increase in imports?

Answer 23

They may face increased competition.

Question 24

What is one potential short-term effect of trade?

Answer 24

Structural unemployment.

Question 25

What is the role of SCORM packages in the lesson schedule?

Answer 25

They are available in LEO2.0 Learning Path for asynchronous learning.

Question 26

What is the duration of the break in the lesson schedule?

Answer 26

1.5 hours.

Question 27

What should students submit by 08:00 a.m. the next day?

Answer 27

* Practice Questions * Reflection Journal

Question 28

What is comparative advantage?

Answer 28

The ability of a party to produce a particular good or service at a lower opportunity cost than another.

Question 29

Which country has a comparative advantage in the production of pumpkins?

Answer 29

Country Y, as it has a lower opportunity cost (0.75 < 2).

Question 30

What should Country X and Country Y do based on their comparative advantages?

Answer 30

They should trade with one another.

Question 31

What is the opportunity cost of producing a soap bar for Stella?

Answer 31

0.50 organic ciders (25/50).

Question 32

What is the opportunity cost of producing an organic cider for Sarah?

Answer 32

4.00 soap bars (20/5).

Question 33

Who should specialize in producing soap bars, Stella or Sarah?

Answer 33

Sarah, since she gives up less units of organic cider than Stella.

Question 34

What is a Free Trade Agreement (FTA)?

Answer 34

A legally binding agreement between 2 or more countries to reduce or eliminate barriers to trade.

Question 35

What are Bilateral Trade Agreements?

Answer 35

Agreements signed between two nations at a time, giving favored trading status between each other.

Question 36

What are Multilateral Trade Agreements?

Answer 36

Agreements signed between many nations at one time.

Question 37

List two potential benefits of Free Trade Agreements (FTAs).

Answer 37

* Tariff concessions for eligible exports * Improve market access for committed sectors

Question 38

What is the main benefit of FTAs for Small-Medium Enterprises (SMEs)?

Answer 38

Give them access to global markets.

Question 39

True or False: The total trade for the country is 3 times the overall of the country’s GDP.

Answer 39

True.

Question 40

What organization is designed to supervise and liberalize international trade?

Answer 40

The World Trade Organization (WTO).

Question 41

What are the objectives of the WTO?

Answer 41

* Administering trade agreements * Acting as a forum for trade negotiations * Settling trade disputes

Question 42

What does opportunity cost refer to?

Answer 42

The best alternative that is foregone when a choice or decision is made.

Question 43

Match the correct person with their greater comparative advantage: Stella or Sarah?

Answer 43

* Stella – Organic Ciders * Sarah – Soap Bars

Question 44

What is the opportunity cost of producing a pumpkin for Country Y?

Answer 44

0.75 kg of blueberries.

Question 45

Fill in the blank: Comparative advantage refers to the ability of a party to produce a particular good or service at a _______.

Answer 45

lower opportunity cost.

Question 46

What type of FTAs allow all nations to be treated equally?

Answer 46

Multilateral Trade Agreements.

Question 47

What is the significance of FTAs for Singapore's economy?

Answer 47

They play an important role in ensuring Singapore companies gain a competitive edge.

Question 48

True or False: FTAs have helped to increase Singaporean investments abroad to $200 billion in 2019.

Answer 48

False. The total amount was $930 billion.

Question 49

What is the role of the WTO in trade agreements?

Answer 49

To provide a framework for negotiating and formalizing trade agreements.

Question 50

What do FTAs typically aim to remove?

Answer 50

Barriers to trade.

Question 51

What is the opportunity cost for Sarah to produce one soap bar?

Answer 51

0.25 organic ciders (5/20).