STMC Term 4 LE1.1 - LE1.8 Review

The concept of 'opportunity cost' highlights the benefits that can be gained from world trade.

• True
• False

To enjoy the benefits of specialisation countries need to trade

• True
• False

Exports are a leakage from the circular flow of income model because goods are sent overseas

• True
• False

A country that has an absolute advantage in the production of all goods cannot gain from specialisation and trade

• True
• False

Different countries have a comparative advantage because opportunity costs differ

• True
• False

Consumers gain when a business exports goods to overseas nations.

• True
• False

An open economy is one that trades freely with the rest of the world

• True
• False

Revenue from exports is considered to be a leakage from the circular flow

• True
• False

Multinational corporations produce more than 25% of global production

• True
• False

Technical differences are not a problem in international trade.

• True
• False