INTERNATIONAL TRADE 1ST EDITION
JOHN MCLAREN INSTRUCTOR MANUAL
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ economic interdependence Answer: producers rely on others; for
goods and services they do not produce
⫸ theory of comparative advantage Answer: trading nations should
produce a certain product if it can do so at a lower opportunity cost than
another trading nation
⫸ absolute advantage Answer: ability to make a product more
efficiently that another trading nation; due in part to unequal distribution
of production factors
⫸ comparative advantage Answer: a nation will specialize in what it can
produce at a lower opportunity cost than any other nation
⫸ imports Answer: goods and services produced in one country and
purchased by another
, ⫸ exports Answer: goods and services produced in one country and sold
in another
⫸ export on prices and quantity Answer: -demand increases and prices
go up
-more workers needed; a larger manufacturing plants needed
⫸ How consumers benefit from international trade Answer: selection of
goods increases and prices decrease
⫸ How producers benefit from international trade Answer: gain new
market for selling, opportunity to increase revenue and earn profit
⫸ The Good and Bad effects on how trade effects employment Answer:
trade leads to more jobs created, some jobs may be eliminated due to
imports replace domestic
⫸ trade barrier Answer: any law that limits free trade between nations
⫸ quota Answer: limit on the amount of a product that can be imported
⫸ dumping Answer: sale of a product in another country at a price
lower than in the home market
JOHN MCLAREN INSTRUCTOR MANUAL
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ economic interdependence Answer: producers rely on others; for
goods and services they do not produce
⫸ theory of comparative advantage Answer: trading nations should
produce a certain product if it can do so at a lower opportunity cost than
another trading nation
⫸ absolute advantage Answer: ability to make a product more
efficiently that another trading nation; due in part to unequal distribution
of production factors
⫸ comparative advantage Answer: a nation will specialize in what it can
produce at a lower opportunity cost than any other nation
⫸ imports Answer: goods and services produced in one country and
purchased by another
, ⫸ exports Answer: goods and services produced in one country and sold
in another
⫸ export on prices and quantity Answer: -demand increases and prices
go up
-more workers needed; a larger manufacturing plants needed
⫸ How consumers benefit from international trade Answer: selection of
goods increases and prices decrease
⫸ How producers benefit from international trade Answer: gain new
market for selling, opportunity to increase revenue and earn profit
⫸ The Good and Bad effects on how trade effects employment Answer:
trade leads to more jobs created, some jobs may be eliminated due to
imports replace domestic
⫸ trade barrier Answer: any law that limits free trade between nations
⫸ quota Answer: limit on the amount of a product that can be imported
⫸ dumping Answer: sale of a product in another country at a price
lower than in the home market
