Specialization in Trade Practice

What is specialization in trade?

• When countries produce all the goods they need

• When countries focus on producing goods they make most efficiently

• When countries avoid trade to be self-sufficient

• When countries impose tariffs to protect their industries

Specialization encourages trade between countries because:

• It allows them to produce everything they need.

• It ensures that all countries produce the same goods.

• Countries trade goods they produce efficiently for goods they lack.

• It eliminates the need for trade barriers.

Specialization decreases the need for trade between countries.

• True

• False

Countries trade because they cannot produce all goods as efficiently as others.

• True

• False

Specialization and trade lead to greater global productivity.

• True

• False

Why does specialization encourage trade between countries?

• It allows countries to focus on producing goods more efficiently.

• It increases the number of goods a country can produce.

• It reduces the need for international agreements.

• It eliminates the need for imports.

What is the purpose of a quota?

• To increase the cost of imported goods

• To limit the amount of a product imported

• To ban trade entirely

• To encourage specialization

Which country in Europe is known for specializing in automobiles, impacting its trade?

• France

• Germany

• Italy

• Spain

What is the main goal of imposing a tariff?

• To encourage more imports

• To protect domestic industries

• To increase exports

• To eliminate trade

How do quotas affect the market?

• They increase the supply of goods

• They limit the supply of goods

• They have no effect on the market

• They encourage more imports