International Trade

How does international trade affect economic well-being?

• It always improves economic conditions.

• It always worsens economic conditions.

• It has no influence at all.

• It can both improve and worsen economic conditions.

What happens to textile prices in Isolandia if the country opens international trade?

• Prices remain unchanged.

• Prices become equal to world prices.

• Prices decrease.

• Prices increase.

Who benefits from free trade in the textile industry?

• Producers benefit, while consumers lose.

• Only producers.

• Consumers benefit, while producers lose.

• Only consumers.

What is a tariff?

• Tax on all goods.

• Tax on domestic goods.

• Tax on imports.

• Tax on exports.

Which of the following factors is not an advantage of international trade?

• Increase in the variety of goods.

• Decrease in the quality of goods.

• Decrease in prices through economies of scale.

• Increase in competition.

What argument against free trade is related to national security?

• National security has nothing to do with trade.

• Free trade increases dependence on other countries.

• Some industries are important for the country's defense.

• Free trade is always safe.

What happens to consumer surplus when the price of textiles increases?

• Consumer surplus increases.

• Consumer surplus decreases.

• Consumer surplus disappears.

• Consumer surplus remains unchanged.

Which of the following factors does not support the argument for protecting new industries?

• Old industries also need protection.

• Protection can lead to long-term losses.

• New industries need protection for growth.

• Protection can be temporary.

Which of the following arguments for free trade is the most common?

• Free trade destroys jobs.

• Free trade increases wealth.

• Free trade does not matter.

• Free trade always leads to a deficit.

What happens to the producer when the country becomes an importer of textiles?

• The producer remains in the same position.

• The producer receives subsidies.

• The producer loses.

• The producer wins.