The reasons for international trade
6.1What the syllabus asks of you
- distinction between absolute and comparative advantage
- benefits of specialisation and free trade (trade liberalisation), including the trading possibility curve
- exports, imports and the terms of trade: measurement of the terms of trade
- exports, imports and the terms of trade: causes of changes in the terms of trade
- exports, imports and the terms of trade: impact of changes in the terms of trade
- limitations of the theories of absolute and comparative advantage
Drill this topic
Every question on The reasons for international trade, untimed, marked as you go.
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Choose the years and how many questions, then print it with the answers on separate pages.
64 questions
1May / June 2026 · Paper 11 · Q27Show mark scheme →
Aapples 50, bananas 80
Bapples 75, bananas 45
Capples 75, bananas 60
Dapples 150, bananas 120
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2May / June 2026 · Paper 12 · Q27Show mark scheme →
Aa greater product choice
Ba more equal distribution of income
Cgreater international specialisation
Dhigher standards of living
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3May / June 2026 · Paper 13 · Q28Show mark scheme →
A\frac{\text{export price index}}{\text{import price index}} \times 100
B\frac{\text{export price index}}{\text{quantity of exports traded}} \times 100
C\frac{\text{import price index}}{\text{export price index}} \times 100
D\frac{\text{quantity of imports traded}}{\text{quantity of exports traded}} \times 100
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4May / June 2026 · Paper 14 · Q28Show mark scheme →
Athe country being willing to impose tariffs on its trading partners
Bthe country having a lower opportunity cost in the production of some goods compared to its trading partners
Cthe country's capacity to export the goods it produces
Dthe country's total productive capacity
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5Oct / Nov 2025 · Paper 11 · Q27Show mark scheme →
Afell by 10
Bfell by 11
Cincreased by 10
Dincreased by 30
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6Oct / Nov 2025 · Paper 11 · Q28Show mark scheme →
Athe movement of factors of production between countries
Bgovernments’ imposition of trade restrictions
Cone country being more efficient in the production of all goods
Dtransport costs outweighing any comparative advantage
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7Oct / Nov 2025 · Paper 12 · Q27Show mark scheme →
AExport prices fall whilst import prices rise.
BExport prices rise by the same amount as import prices.
CExport prices rise slower than import prices.
DExport prices rise whilst import prices stay the same.
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8Oct / Nov 2025 · Paper 13 · Q28Show mark scheme →
AOne country can produce a product at a lower opportunity cost than another country.
BOne country can produce more of a product than another country, using a given level of resources.
COne country has lower barriers to trade than another country.
DOne country is making more efficient use of factors of production than another country.
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9Oct / Nov 2025 · Paper 13 · Q29Show mark scheme →
Athe production possibility curve
Bthe aggregate demand curve
Cthe principle of absolute advantage
Dthe trading possibility curve
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10Oct / Nov 2025 · Paper 13 · Q30Show mark scheme →
Aterms of trade increases; current account increases
Bterms of trade increases; current account decreases
Cterms of trade decreases; current account increases
Dterms of trade decreases; current account decreases
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11Oct / Nov 2025 · Paper 14 · Q27Show mark scheme →
AThe quantity of imports rose relative to the quantity of exports.
BThe price of exports rose relative to the price of imports.
CThe price of imports rose relative to the price of exports.
DThe value of exports rose relative to the value of imports.
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12Oct / Nov 2025 · Paper 14 · Q28Show mark scheme →
AEngaging in international trade enables the country to achieve a higher average standard of living.
BOther countries are more efficient at producing some goods.
CThere are some products that the country cannot produce.
DThe country has a comparative advantage in the production of all of its goods compared to other countries.
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13May / June 2025 · Paper 11 · Q26Show mark scheme →
AIt cannot be calculated accurately enough.
BIt includes more than one currency.
CIt is a ratio of two index numbers.
DIt measures change over time.
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14May / June 2025 · Paper 12 · Q28Show mark scheme →
Athe average price of exports divided by the average price of imports
Bthe average price of imports divided by the average price of exports
Cthe value of exports divided by the value of imports
Dthe value of imports divided by the value of exports
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15May / June 2025 · Paper 13 · Q29Show mark scheme →
Athere will be a decrease in cost-push inflation
Bthere will be a decrease in living standards
Cthere will be an increase in the budget surplus
Dthere will be an increase in the volume of exports
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16May / June 2025 · Paper 13 · Q30Show mark scheme →
ACountry X has an absolute advantage in producing mobile phones and a comparative advantage in producing televisions.
BCountry X has an absolute advantage in producing televisions and a comparative advantage in producing mobile phones.
CCountry Y has an absolute advantage in producing mobile phones and a comparative advantage in producing televisions.
DCountry Y has an absolute advantage in producing televisions and a comparative advantage in producing mobile phones.
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17Feb / March 2025 · Paper 12 · Q26Show mark scheme →
Aaverage price of country X's exports divided by the average price of country Y's exports
Bthe ratio of an index of country X's export prices to an index of its import prices
Cvalue of country X's exports divided by the value of country Y's exports
Dvalue of country X's imports divided by the value of country Y's imports
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18Feb / March 2025 · Paper 12 · Q29Show mark scheme →
ACountry Q has a comparative advantage in the production of barley.
BCountry Q has an absolute advantage in producing both goods.
CCountry R has an absolute advantage in the production of barley.
DThere is no comparative advantage.
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19Oct / Nov 2024 · Paper 11 · Q26Show mark scheme →
ACountry X should produce only steel.
BCountry X will not gain from international trade.
CCountry Y has no comparative advantage.
DCountry Y will not gain from international trade.
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20Oct / Nov 2024 · Paper 11 · Q30Show mark scheme →
AIts imports rise in value less than its exports.
BIts imports rise in volume less than its exports.
CThe price of its imports rises by less than the prices of its exports.
DThe value of its external payments rises by less than the value of its external receipts.
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21Oct / Nov 2024 · Paper 12 · Q27Show mark scheme →
Afalls by 5% / rises by 5%
Bremains unchanged / rises by 10%
Crises by 5% / falls by 5%
Drises by 10% / remains unchanged
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22Oct / Nov 2024 · Paper 13 · Q29Show mark scheme →
Awhen the price of exports falls more than the price of imports
Bwhen there is no change in the price of exports but a fall in the price of imports
Cwhen the value of exports increases relative to the total value of imports
Dwhen the volume of exports increases relative to the total volume of imports
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23May / June 2024 · Paper 11 · Q26Show mark scheme →
Ahigh / high
Bhigh / low
Clow / high
Dlow / low
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24May / June 2024 · Paper 11 · Q27Show mark scheme →
A1 and 2
B1 only
C2 and 3
D2 only
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25May / June 2024 · Paper 13 · Q28Show mark scheme →
A120 000
B140 000
C160 000
D180 000
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26May / June 2024 · Paper 13 · Q30Show mark scheme →
Aa decrease in its budget deficit
Ba relatively low rate of domestic inflation
Ca rise in its exchange rate
Da surplus on its primary income account
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27Feb / March 2024 · Paper 12 · Q24Show mark scheme →
ACountry X has an absolute advantage in wheat and car production.
BCountry Y has an absolute advantage in wheat and car production.
CCountry Y has a comparative advantage in wheat production.
DOpportunity cost of wheat and car production is the same between countries.
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28Feb / March 2024 · Paper 12 · Q26Show mark scheme →
Awhen the volume of exports falls and the volume of imports rises
Bwhen the total value of exports falls and the total value of imports rises
Cwhen the balance of trade in goods moves from deficit to surplus
Dwhen the average price of exports rises and the average price of imports falls
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29Oct / Nov 2023 · Paper 11 · Q20Show mark scheme →
A1M for 0.75N
B1M for 0.8N
C1M for 1N
D1M for 2N
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30Oct / Nov 2023 · Paper 12 · Q18Show mark scheme →
Aa deficit in its trade in goods
Ban improvement in its terms of trade
Can increase in its inflation rate
Da rise in its exchange rate
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31Oct / Nov 2023 · Paper 12 · Q19Show mark scheme →
Aabsolute advantage
Bcomparative advantage
Cspecialisation
Dterms of trade
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32Oct / Nov 2023 · Paper 13 · Q24Show mark scheme →
AFree trade will benefit both R and S.
BFree trade will benefit neither R nor S.
CFree trade will benefit R but not S.
DFree trade will benefit S but not R.
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33May / June 2023 · Paper 11 · Q15Show mark scheme →
AIt is when a country has a higher opportunity cost in producing a good than another country.
BIt is when a country has a lower wage cost in producing a good than another country.
CIt is when the relative prices of exports of a country are greater than the relative prices of its imports.
DIt is when a country's output of a good is greater per unit of resource than another country.
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34May / June 2023 · Paper 11 · Q23Show mark scheme →
Arice 600, tea 200
Brice 600, tea 500
Crice 1200, tea 200
Drice 1200, tea 1000
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35May / June 2023 · Paper 11 · Q24Show mark scheme →
AThe terms of trade will improve.
BThe terms of trade will not change.
CThe terms of trade will worsen.
DThe terms of trade will worsen only if the depreciation causes inflation.
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36May / June 2023 · Paper 12 · Q25Show mark scheme →
A1, 2 and 3
B1 and 2 only
C1 and 3 only
D2 and 3 only
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37May / June 2023 · Paper 12 · Q26Show mark scheme →
AIt will fall by 5 units.
BIt will fall by 30 units.
CIt will rise by 5 units.
DIt will rise by 30 units.
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38May / June 2023 · Paper 13 · Q22Show mark scheme →
AExport prices have increased each year.
BThe general level of prices has fallen.
CThe terms of trade have deteriorated.
DThe volume of imports increasingly exceeds the volume of exports.
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39May / June 2023 · Paper 13 · Q23Show mark scheme →
AThe opportunity cost of country Y producing two shoes is four t-shirts.
BThe opportunity cost of country X producing one t-shirt is four shoes.
CThe total output of shoes and t-shirts after specialisation would be 24 000.
DThe total output of shoes and t-shirts after specialisation would be 28 000.
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40Feb / March 2023 · Paper 12 · Q24Show mark scheme →
Aits balance of payments performance
Bthe purchasing power of its exports
Cthe standard of living within the country
Dthe value of its real exchange rate
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41Oct / Nov 2022 · Paper 11 · Q24Show mark scheme →
A\frac{\text{price index of exports}}{\text{price index of imports}} \times 100
B\frac{\text{price index of imports}}{\text{price index of exports}} \times 100
C\frac{\text{total value of exports}}{\text{total value of imports}} \times 100
Dtotal value of exports – total value of imports
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42Oct / Nov 2022 · Paper 12 · Q22Show mark scheme →
AIts total value of imports rises less than its total value of exports.
BIts volume of imports rises less than its volume of exports.
CThe prices of its imports rise by less than the prices of its exports.
DThe value of its external payments rises by less than the value of its external receipts.
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43Oct / Nov 2022 · Paper 12 · Q25Show mark scheme →
ACountry X has absolute advantage in the production of both goods.
BCountry X has comparative advantage in the production of sugar.
CCountry Y has absolute advantage in the production of textiles.
DCountry Y has comparative advantage in the production of sugar.
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44Oct / Nov 2022 · Paper 13 · Q23Show mark scheme →
A90.9
B97.8
C110.0
D111.0
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45May / June 2022 · Paper 11 · Q24Show mark scheme →
Aa fall in the price of exports relative to the price of imports
Ba fall in the price of imports relative to the price of exports
Ca fall in the quantity of exports relative to the quantity of imports
Da fall in the quantity of imports relative to the quantity of exports
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46May / June 2022 · Paper 12 · Q21Show mark scheme →
AExport prices fall by 10% and import prices fall by 5%.
BExport prices fall by 10% and import prices rise by 5%.
CExport prices rise by 5% and import prices rise by 10%.
DExport prices rise by 10% and import prices rise by 5%.
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47May / June 2022 · Paper 13 · Q20Show mark scheme →
Aan increase in tariffs on imports
Ba decrease in the volume of imports sold
Can increase in the prices of exports
Da decrease in the volume of exports sold
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48May / June 2022 · Paper 14 · Q27Show mark scheme →
AIt will result from a fall in the demand for its exports.
BIt will result from an increase in consumers' incomes in its major trading partners.
CIt will result in a decrease in interest rates by its major trading partners.
DIt will result in an improvement in its balance of trade.
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49Feb / March 2022 · Paper 12 · Q21Show mark scheme →
Arose; fell
Brose; rose
Crose; unchanged
Dunchanged; fell
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50Feb / March 2022 · Paper 12 · Q25Show mark scheme →
Abalance of trade
Bcurrent account balance
Cexchange rate
Dterms of trade
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51Feb / March 2022 · Paper 12 · Q27Show mark scheme →
AX will continue to produce drink.
BY will produce drink instead of food.
CWorld drink production will rise.
DWorld food production will fall.
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52Oct / Nov 2021 · Paper 11 · Q4Show mark scheme →
ABoth economies face increasing opportunity costs.
BPoint P represents the final equilibrium outcome.
CPoint R shows the total possible combined production of food and drink.
DAll points on Y1–X2 are only attainable through trade.
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53Oct / Nov 2021 · Paper 11 · Q21Show mark scheme →
Athe difference between the volume of its exports and its imports
Bthe average price of its exports divided by the average price of its imports
Cthe total value of its exports divided by the total value of its imports
Dthe volume of its exports divided by the volume of its imports
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54Oct / Nov 2021 · Paper 11 · Q23Show mark scheme →
ACountry X has a comparative advantage in the production of both goods.
BCountry X has a comparative advantage in the production of rice.
CCountry Y has a comparative advantage in the production of both goods.
DCountry Y has a comparative advantage in the production of rice.
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55Oct / Nov 2021 · Paper 12 · Q19Show mark scheme →
Athe existence of floating exchange rates
Bthe law of absolute advantage
Cthe Marshall–Lerner condition
Dthe terms of trade
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56Oct / Nov 2021 · Paper 12 · Q23Show mark scheme →
AIts balance of trade will improve.
BIts balance of trade will worsen.
CIts terms of trade have improved.
DIts terms of trade have worsened.
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57Oct / Nov 2021 · Paper 12 · Q25Show mark scheme →
ALaura
BMo
CNathan
DOmar
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58Oct / Nov 2021 · Paper 13 · Q19Show mark scheme →
AEach country has different goods to sell and different tastes.
BEach country has different opportunity costs of production.
COne country has the absolute advantage in producing both goods.
DThe prices of goods are different between each country.
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59Oct / Nov 2021 · Paper 13 · Q21Show mark scheme →
Aexport prices: –10%; export volumes: +15%; import prices: –15%; import volumes: +10%
Bexport prices: –3%; export volumes: +6%; import prices: –2%; import volumes: +1%
Cexport prices: +5%; export volumes: –5%; import prices: +6%; import volumes: –1%
Dexport prices: +10%; export volumes: –5%; import prices: +12%; import volumes: –6%
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60May / June 2021 · Paper 11 · Q20Show mark scheme →
AIt would force inefficient firms out of business.
BIt would increase the quantity of goods available for domestic consumption.
CIt would make domestically-produced goods more expensive than imports.
DIt would make the country's exports relative to imports more competitive internationally.
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61May / June 2021 · Paper 11 · Q24Show mark scheme →
ACountry W has a comparative advantage in producing cotton.
BCountry X has a comparative advantage in producing rice.
CCountry Y has a comparative advantage in producing rice.
DCountry Z has an absolute advantage in producing cotton.
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62May / June 2021 · Paper 12 · Q24Show mark scheme →
Aabsolute advantage / comparative advantage
Babsolute advantage / the terms of trade
Ccomparative advantage / absolute advantage
Dthe terms of trade / comparative advantage
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63May / June 2021 · Paper 13 · Q23Show mark scheme →
Aa reduction in transportation costs because of a fall in world oil prices
Bdomestic wage rates increase at a faster rate than output per worker
Cthe domestic labour force becomes more occupationally immobile
Dtrading partners increase tariffs on imported goods
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64Feb / March 2021 · Paper 12 · Q20Show mark scheme →
Aa depreciation of the country's currency
Ba reduction in import tariffs
Ca rise in the price of exported goods
Dan improvement in the balance of trade
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