1
International Political Economy Questions with
Answers (100% Correct Answers)
IPE (International Political Economy) Answer: the interdisciplinary
science that examines the dynamic interactions between markets, states
and societies, and how the tensions and conflicts between these arenas
both affect and reflect conditions outside the nation-state and society
State / Nation Answer: Nation, state and nation-state are three different
concepts. A nation defines a group of people with a shared sense of
cultural identity and territoriality. A state is a legal concept describing a
a social group that occupies a territory and is organized under
common political institutions and an effective government. A nation-
state, synonymous with the term country -- since the 1648 Peace of
Westphalia, this has been the major political (sovereign) unit of the
international system.
Peace of Westphalia Answer: the nation-state was born out of this 1648
________________diplomatic summit -- emphasized the ideas of
sovereignty and self-determination as basic principles of the state and
thus the global system
© 2025 All rights reserved
,2
factor endowments Answer: the amount of land, labor, capital, and
entrepreneurship that a country possesses and can exploit for
manufacturing -- commonly referenced as part of the Heckscher-Ohlin
model
division of labor Answer: The main focus of Adam Smith's The Wealth
of Nations lies in the concept of economic growth. ____________, or
specialization is essentially the breaking down of large jobs into many
tiny components. Under this regime each worker becomes an expert in
one isolated area of production, thus increasing his efficiency. Also also
implies assigning each worker to the job that suits him best (different
attributes and knowledge)
Specialization Answer: essentially the breaking down of large jobs into
many tiny components. Under this regime each worker becomes an
expert in one isolated area of production, thus increasing his efficiency.
This saves time and enhances overall gains from exchange and trade.
Ultimately, this resulted from uneven distribution and attributes but led
to greater abundance of the necessities and conveniences of life
(similar to division of labor)
© 2025 All rights reserved
,3
absolute advantage Answer: this is the idea that ability of a party (an
individual, or firm, or country) to produce more of a good or service
than competitors, using the same amount of resources (Adam Smith
"The tailor does not make his own shoes, but buys them from the
shoemaker")
comparative advantage Answer: producer can do both areas efficiently
but specializes anyways b/c not enough resources and can make more
money (**Ricardo built this idea off of Smith's idea of absolute
advantage) included in this is the idea of an inherent opportunity cost
opportunity cost Answer: cost of any activity measured in terms of the
value of the best alternative that is not chosen (that is foregone). It is
the sacrifice related to the second best choice available to someone, or
group, who has picked among several mutually exclusive choices
Free market Answer: This is the core of Adam Smith's thesis: giving
everyone freedom to produce and exchange goods as they pleased
(free trade) and opening all markets to competition (international as
well as domestic). This became known as the invisible hand
© 2025 All rights reserved
, 4
zero-sum game Answer: gains by one party equal the losses for the
others. Plays a major role in the realist-mercantilist perspective (not
liberal thought)
Positive sum game Answer: any interaction between actors that makes
all participants simultaneously better off -- this is the liberalist
argument of the benefits of a free marker
stag hunt Answer: basically we must decide whether to act in our own
interest or cooperate to save the group (referring to giving up
sovereignty in exchange for the regulation and benefits of IOs) : Jean
Jaques Rousseau's analogy of the five hunters trying to catch a stag
(deer) by cooperating with one another. The analogy forces us to
consider whether it is rational to cooperate to solve problems with one
another, or not to--given that someone else may choose not to
cooperate and ruin things for everyone. The analogy is often applied to
security situations that require cooperation to move forward on a
problem like arms control.
trade Answer: the commercial exchange (buying and selling on
domestic or international markets) of goods and services
© 2025 All rights reserved
International Political Economy Questions with
Answers (100% Correct Answers)
IPE (International Political Economy) Answer: the interdisciplinary
science that examines the dynamic interactions between markets, states
and societies, and how the tensions and conflicts between these arenas
both affect and reflect conditions outside the nation-state and society
State / Nation Answer: Nation, state and nation-state are three different
concepts. A nation defines a group of people with a shared sense of
cultural identity and territoriality. A state is a legal concept describing a
a social group that occupies a territory and is organized under
common political institutions and an effective government. A nation-
state, synonymous with the term country -- since the 1648 Peace of
Westphalia, this has been the major political (sovereign) unit of the
international system.
Peace of Westphalia Answer: the nation-state was born out of this 1648
________________diplomatic summit -- emphasized the ideas of
sovereignty and self-determination as basic principles of the state and
thus the global system
© 2025 All rights reserved
,2
factor endowments Answer: the amount of land, labor, capital, and
entrepreneurship that a country possesses and can exploit for
manufacturing -- commonly referenced as part of the Heckscher-Ohlin
model
division of labor Answer: The main focus of Adam Smith's The Wealth
of Nations lies in the concept of economic growth. ____________, or
specialization is essentially the breaking down of large jobs into many
tiny components. Under this regime each worker becomes an expert in
one isolated area of production, thus increasing his efficiency. Also also
implies assigning each worker to the job that suits him best (different
attributes and knowledge)
Specialization Answer: essentially the breaking down of large jobs into
many tiny components. Under this regime each worker becomes an
expert in one isolated area of production, thus increasing his efficiency.
This saves time and enhances overall gains from exchange and trade.
Ultimately, this resulted from uneven distribution and attributes but led
to greater abundance of the necessities and conveniences of life
(similar to division of labor)
© 2025 All rights reserved
,3
absolute advantage Answer: this is the idea that ability of a party (an
individual, or firm, or country) to produce more of a good or service
than competitors, using the same amount of resources (Adam Smith
"The tailor does not make his own shoes, but buys them from the
shoemaker")
comparative advantage Answer: producer can do both areas efficiently
but specializes anyways b/c not enough resources and can make more
money (**Ricardo built this idea off of Smith's idea of absolute
advantage) included in this is the idea of an inherent opportunity cost
opportunity cost Answer: cost of any activity measured in terms of the
value of the best alternative that is not chosen (that is foregone). It is
the sacrifice related to the second best choice available to someone, or
group, who has picked among several mutually exclusive choices
Free market Answer: This is the core of Adam Smith's thesis: giving
everyone freedom to produce and exchange goods as they pleased
(free trade) and opening all markets to competition (international as
well as domestic). This became known as the invisible hand
© 2025 All rights reserved
, 4
zero-sum game Answer: gains by one party equal the losses for the
others. Plays a major role in the realist-mercantilist perspective (not
liberal thought)
Positive sum game Answer: any interaction between actors that makes
all participants simultaneously better off -- this is the liberalist
argument of the benefits of a free marker
stag hunt Answer: basically we must decide whether to act in our own
interest or cooperate to save the group (referring to giving up
sovereignty in exchange for the regulation and benefits of IOs) : Jean
Jaques Rousseau's analogy of the five hunters trying to catch a stag
(deer) by cooperating with one another. The analogy forces us to
consider whether it is rational to cooperate to solve problems with one
another, or not to--given that someone else may choose not to
cooperate and ruin things for everyone. The analogy is often applied to
security situations that require cooperation to move forward on a
problem like arms control.
trade Answer: the commercial exchange (buying and selling on
domestic or international markets) of goods and services
© 2025 All rights reserved
