Micro Economics MCQ (GK Set-1) with Answers

Country A has a comparative advantage in cloth.

Country B has a comparative advantage in wheat

Country A has an absolute advantage in cloth.

Country B has an absolute advantage in wheat.

Country A will export cloth to B, and import wheat from B, and each country will be able to consume more of both products than before

Country A will export wheat to B, and import cloth from B, and each country will be able to consume more of both products than before

Country A will export cloth to B, and import wheat from B, but only country B will gain from the trade.

Country A will export wheat to B, and import cloth from B, but only country B will gain from the trade.

Under no circumstances.

If a worker in country D could produce fewer than 3 tents a week.

If a worker in country D could produce 3 tents a week.

If a worker in country D could produce more than 3 tents a week

If the countries did not trade, then E would have a lower opportunity cost for tractors

Even though there is trade, E has a lower opportunity cost for tractors.

E is sure to produce no televisions while F is sure to produce no tractors.

Neither country can consume at a point outside its production possibility frontier.

Two countries may benefit from trade, even if their production possibility frontiers have identical shapes, if preferences differ in the two countries.

Two countries may benefit from trade, even if their production possibility frontiers have identical shapes, if industries have substantial economies of scale.

When two countries benefit from the opening up of trade, all citizens in each country will benefit.

Differences in the degree of human capital offer one reason why two countries may have production possibility frontiers that differ in shape.