State agricultural university MBA (ABM) admission · India · State agricultural universities via ICAR AIEEA-PG Group 19
Original practice questions written to the published syllabus · not past papersWhy countries trade, how trade is measured and regulated, and how an agribusiness actually exports.
In the exams: agricultural economics PhD entrance and fellowship examinations, trade (heavy); agribusiness management PhD entrance and fellowship examinations, international marketing (heavy); agricultural master's entrance examinations, WTO and trade (present)
How our questions for State agricultural university MBA admission spread across the units of International Agri Trade & Export Management. Difficulty: 30 easy, 26 medium, 2 hard.
| TRIPS, TRIMs, SPS and TBT agreements | 10 | |
| Tariffs and non-tariff measures | 8 | |
| WTO Agreement on Agriculture and its boxes | 7 | |
| Absolute and comparative advantage | 5 | |
| Export promotion organisations | 5 | |
| Porter's diamond | 4 | |
| International marketing mix | 4 | |
| Anti-dumping | 3 | |
| Market-entry modes | 3 | |
| Heckscher-Ohlin factor-endowment theory | 2 | |
| Product life-cycle theory of trade | 2 | |
| Exchange rates | 2 | |
| Leontief paradox | 1 | |
| Balance of payments | 1 | |
| Export procedures and documentation | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
In country A, a tonne of rice needs 2 labour-days and a tonne of wheat 4; in country B, rice needs 6 and wheat 8. Which statement is correct?
A. A has a comparative advantage in rice and B in wheat
Opportunity cost of rice: A = 2/4 = 0.5 t wheat, B = 6/8 = 0.75 t wheat. A's is lower, so A specialises in rice; B's opportunity cost of wheat (8/6 = 1.33 t rice) is lower than A's (4/2 = 2 t rice), so B specialises in wheat. Absolute advantage in both does not rule out gains.
Further reading: Salvatore, International Economics
The gains from trade are conventionally divided into:
A. Gains from exchange and gains from specialisation
Even with production unchanged, trading at world prices raises welfare (exchange gain); moving production towards comparative advantage adds the specialisation gain. The other options mix policy instruments or distributional effects with the concept.
Further reading: Salvatore, International Economics
According to the Heckscher-Ohlin theorem, a labour-abundant country will export:
B. Goods that use labour intensively
H-O: a country exports goods intensive in its relatively abundant factor. Capital-intensive goods are exported by capital-abundant countries; absolute productivity is Smith's criterion.
Further reading: Salvatore, International Economics
Country A has 100 units of capital and 50 of labour; country B has 60 units of each. By the physical definition of factor abundance:
B. A is capital-abundant and should export the capital-intensive good
Compare ratios, not totals: K/L is 100/50 = 2 in A and 60/60 = 1 in B, so A is relatively capital-abundant and, under H-O, exports the capital-intensive good.
Further reading: Salvatore, International Economics
Small country: Qd = 1000 − 2P, Qs = −200 + 2P, world price 200. A specific tariff of 50 is imposed. Imports fall from:
A. 400 to 200
At 200: Qd = 600, Qs = 200, imports 400. At 250: Qd = 500, Qs = 300, imports 200. 600→500 is consumption and 200→300 is production.
Further reading: Salvatore, International Economics
Tariff escalation refers to:
D. Tariffs that rise with the degree of processing of a product
Low duties on raw materials and higher duties on processed products give processors in importing countries high effective protection and discourage processing in exporting countries. Volume-linked rates describe a TRQ or safeguard.
Further reading: Salvatore, International Economics
A mandatory rule requiring a nutrition information panel on packaged foods, not aimed at a food-safety risk, falls under the:
B. TBT Agreement
The SPS-TBT boundary depends on purpose. Food-safety and pest or disease measures are SPS; other technical regulations such as nutrition labelling, quality and packaging are TBT.
Further reading: WTO TBT Agreement
Which market-entry mode involves the lowest resource commitment and control for a firm?
D. Indirect exporting through a home-country merchant exporter
Indirect exporting leaves foreign marketing to intermediaries: low cost and risk, little control or market learning. Subsidiaries and joint ventures need investment.
Further reading: Cateora et al., International Marketing
In Perlmutter's EPRG framework, a firm that treats each country market as unique and adapts its marketing to each is:
D. Polycentric
Polycentric firms adapt country by country; ethnocentric firms apply home practices; regiocentric firms treat regions as units; geocentric firms see the world as one market with local adaptation where needed.
Further reading: Cateora et al., International Marketing
The International Trade Centre (ITC) in Geneva is:
C. A joint WTO-United Nations agency supporting exporters in developing countries
The ITC, jointly run by the WTO and the UN (through UNCTAD), provides market intelligence and capacity building. Incoterms come from the ICC; HS from the WCO.
Further reading: International Trade Centre
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