Faculty of Commerce
Third grade
English Section
Dr. Nanis Fekry
International Economics
Tutorial one
 Indicate whether the following sentences are correct or false:
(1) According to the mercantilist views, all countries can simultaneously have an
export surplus.
(2) Mercantilists proposed that export surplus resulting from international trade will be
stored as a precious metal basically gold and silver.
(3) Mercantilists encouraged free international trade.
(4) With international trade, a country will export computers. Prior to international
trade, the quantity of computers produced in the country is higher than the quantity
of computers consumed in the country.
(5) According to Adam Smith’s theory all nations would gain from free trade.
(6) Most of the world trade, especially trade among developed countries, could be
explained by absolute advantage.
(7) Adam Smith supported a policy of laissez-faire.
(8) For two nations to trade with each other voluntarily, both nations must gain.
(9) In the absence of trade, a nation can only consume the commodities that it produce
(10) Comparative advantage is a special case of the theory of Absolute advantage.
 If one hour of labor time produces eight barrels of oil and two tons of potato in Kuwait
while one hour of labor time produces four barrels of oil and five tons of potato in Saudi
Arabia. What is the gain from trade for each nation if 8 barrels of oil are exchanged for
8 tons of potato?
Barrels of oil/hour
Tons of potato/hour
Kuwait
8
2
1
Saudi Arabia
4
5